Egypt’s annual headline urban inflation rose to 35.7% in February 2024, up from 29.8% in January 2024. This increase was due to a surge in core food and non-food prices, which outweighed the previous favourable base effect. As a result, annual food inflation, which had been slowing down for four months, jumped to 50.9% in February from 47.9% in January. Similarly, annual non-food inflation climbed to 26.1% from 19.6%.
After seven months of decline, annual core inflation turned upward, reaching 35.1% in February, a significant rise from 29.0% in January. This uptick reflects widespread price hikes, including those for core food items, services, and retail goods. Monthly core inflation hit a record 13.2% in February, surpassing the 8.1% rate from the previous year.
February’s monthly headline urban inflation marked a historic high at 11.4%, compared to 6.5% a year earlier, representing the first instance of double-digit monthly inflation. The pressures of February 2024 underscore the anticipation of higher inflation and the impact of foreign exchange market fluctuations. These factors highlight the importance of the Monetary Policy Committee’s actions on 6 March 2024. Price increases were influenced by both seasonal elements, such as Ramadan’s effect on food prices and the rescheduling of educational expenses from October 2023 to February 2024 by CAPMAS, and non-seasonal factors like tobacco, medical products, household items, and rent.
Rural annual headline inflation also saw an increase, reaching 36.3% in February from 32.5% in January, while nationwide annual headline inflation rose to 36.0% from 31.2%.
Specific price changes included:
- Poultry and Red meat: up 32.6% and 19.6% respectively, contributing 2.97% to the monthly inflation.
- Dairy products: a record increase of 11.4%, adding 0.53% to inflation.
- Oils and Fats: up 20.2%, contributing 0.66%.
- Pasta and Market Rice: up 30.7% and 10.6% respectively, adding 0.50%.
- Fish & seafood: increased by 13.0%, contributing 0.38%.
- Other core food items (eggs, pulses, sugar, tea, coffee, etc.): contributed 1.42%.
- Services: rose by 6.7%, adding 1.88%, mainly due to delayed school costs and higher spending on dining and housing.
- Retail items: increased by 10.7%, contributing 1.39%, driven by higher costs for educational materials, medical equipment, household and personal care products, and clothing.
- Regulated Items: Saw a 6.1% price increase, contributing 1.24% to the monthly headline inflation. Key factors were higher costs of tobacco, public education fees, water services, and medical products.
- Fresh Produce: Prices of fresh fruits and vegetables rose by 5.8% and 6.4% respectively, jointly adding 0.39% to the monthly headline inflation.
Influenced by the core CPI items mentioned above. Core food items had a significant impact, contributing 8.80%. Services followed with a 2.56% contribution, while retail items added 1.89% to the monthly core inflation.
