Egypt’s annual headline inflation broke another record in August, rising to 37.4 per cent from 36.5 per cent the previous month, driven by higher food prices, data from the country’s statistics agency Capmas showed on Sunday.
Vegetables recorded the highest price increase of 22.4 per cent during the month, the agency said.
Higher levels of consumption, which are typically recorded in summer, in addition to increased production costs, were the main reasons for the surge in food prices, according to Naeem Brokerage.
August’s inflation reading was slightly below the 37.6 per cent estimated by the firm, it said.
On a monthly basis, the country’s inflation rate slowed slightly to 1.6 per cent from 1.9 per cent in July.
Though price increases, mostly small, were recorded across the food and beverages category, prices of breads and cereals dropped by 1.1 per cent in August compared to the previous month. Meat and poultry prices dropped by 2.5 per cent.
The lowest increase recorded in the food and beverages basket, which accounts for 37.4 per cent of the country’s urban consumer price index, were in fish and seafood items, whose prices increased by 0.2 per cent month-on-month.
Overall, food and beverage prices rose by 71.9 per cent in August compared to the same month last year, according to Capmas.
Tobacco prices, which surged in July by 8 per cent month-on-month, witnessed a slower rise of 5.8 per cent in August, Capmas data showed.
Naeem Brokerage said August’s inflation readings for the Arab world’s third-largest economy were largely in line with analysts' expectations.
The firm reiterated what other financial firms, such as Goldman Sachs, had predicted for the Egyptian economy, namely that inflation would remain elevated until the fourth quarter and cool off in 2024 provided there are no major shifts in the Egyptian pound's exchange rate.
Naeem Brokerage expects the country’s inflation rate to drop below 35 per cent in October of this year due to a high base effect.
Egypt has devalued its currency three times since March 2022 and the pound has lost over half its value since then.
Additionally, a dollar crunch has hindered much of the country’s industries, which rely heavily on imported components.