Egypt’s annual urban inflation increased to 5.9% in December 2021 from 5.6% in November 2021, according to a report released by the Central Bank of Egypt (CBE).
The increase in inflation came partially due to unfavourable base effects. This comes as monthly urban inflation recorded -0.1% in December 2021 compared to -0.4% in December 2020.
Consequently, on average, annual urban inflation recorded 5.2% in 2021 compared to 5% in 2020.
Monthly urban inflation in December 2021 was mainly driven by seasonally lower prices of fresh vegetables, especially tomatoes and potatoes.
Meanwhile, prices of core food items were broadly stable as the decline in poultry prices were broadly offset by higher prices of other core food items, namely red meat, edible oil, and cheese among others.
On the other hand, the decline in food prices more than offset the higher prices of non-food items, which mainly reflected higher prices of natural gas for houses as well as butane gas prices as announced by the government, which is their first official increase since 2019.
Additionally, it also reflected higher prices of rent, private hospitals, outpatients’ services, as well as cafes and restaurants among others.
On an annual basis, the increase in inflation during December 2021 was driven by a higher annual contribution of non-food items, and further supported by higher food items’ contribution.
The increase in non-food items’ contribution came as annual non-food inflation increased to 4.8% in December 2021 from 4.5% in November 2021.
On the other hand, annual food inflation picked up its upward trend that started in May 2021 and was only interrupted in November 2021 to record 8.4% in December 2021 from 8.1 % in November 2021 due to a weaker decline in the prices of volatile food items in December 2021 relative to December 2020.
Driven by the higher annual contribution of services and retail items, annual core inflation increased for the fourth consecutive month to record 6% in December 2021 compared to 5.8% in November 2021.
The increase was partly affected by unfavourable base effects which reflect the muted inflationary pressures during December 2020.
This comes as monthly core inflation recorded 0.2% in December 2021 compared to zero in December 2020.
Furthermore, nationwide annual inflation and annual rural inflation increased to record 6.5% and 7.1% in December 2021 from 6.2% and 6.8% in November 2021, respectively.
Additionally, the prices of fresh vegetables declined by 8.8%, while prices of fresh fruits increased by 0.1%. Together, fresh vegetables and fresh fruits contributed by -0.29% to the monthly headline inflation.
Prices of poultry declined by 3.9% for the second consecutive month, to contribute -0.15% to the monthly headline inflation.
Prices of eggs also declined by 1.3%, for the first time in seven months, to contribute -0.02% to the monthly headline inflation.
Moreover, the prices of fish and seafood declined by 0.5% to contribute -0.01% to the monthly headline inflation.
However, the prices of red meat increased by 0.7%, contributing 0.03% to the monthly headline inflation.
The prices of dairy products also increased by 1.1% to contribute 0.04% to the monthly inflation.
The prices of other core food items, including other edible oils, fats, rice, pasta, pulses, and tea increased as well to contribute 0.10% to monthly headline inflation.
The prices of regulated items also increased by 0.3%, contributing 0.08% to the monthly headline inflation. This was mainly due to the increase in the prices of butane and piped gas service.
Furthermore, the prices of services increased by 0.3% to contribute by 0.09% to the monthly headline inflation. This was due to the increase in rental values, expenditures on restaurants and cafes, prices of outpatient services, as well as private hospitals’ services, among others.
The prices of retail items also increased by 0.3%, contributing 0.04% to the monthly inflation. This was mainly due to the increase in prices of clothing, cleaning products, and personal care products.
Monthly core inflation was affected as well by the price changes of the aforementioned core CPI items.
Services items also contributed 0.13% to monthly core inflation. Retail items also contributed 0.06% to monthly core inflation.
Meanwhile, core food items contributed -0.02% to monthly core inflation.
