In a surprising turn of events, Egypt’s annual headline inflation rate surged to 13.1% in March, marking an end to the declining trend observed over the past six months. This increase, reported by the Central Agency for Public Mobilization and Statistics (CAPMAS), is attributed to escalating costs across various sectors, coinciding with recent global economic turbulence.
A detailed breakdown from CAPMAS reveals that the food and beverages sector experienced a significant rise of 6.5%. Key contributors to this increase include cereals and bread, which spiked by 8.1%, and fruits, which skyrocketed by an astonishing 76.7%. Such dramatic rises in essential commodities have driven the overall inflationary pressure.
Additionally, the prices of clothing and footwear jumped by 18.3%, largely due to increased fabric costs and growing demand for ready-made garments. The housing sector also felt the heat, with rents and utility costs pushing prices up by 17.4%.
The transportation sector, already burdened by higher vehicle purchase costs, saw an inflation rate of 29.5%, prior to last weekend’s fuel price hike. This increase is expected to have broader economic repercussions, further straining household budgets and elevating production costs across industries.
Dr. Ahmed El-Badry, an economist at the Egyptian Economic Reform Institute, explains, “The recent spike in transportation and healthcare costs is concerning. It reflects a compounded effect of global economic factors, such as the US tariffs, and domestic challenges like fuel price adjustments. These issues are likely to sustain inflationary pressures in the near term.”
Healthcare costs soared by 25.5%, driven by the rising expenses of medical products and services. Meanwhile, the telecommunications sector recorded an 11.4% rise, primarily due to increased postal service tariffs.
The monthly inflation rate also accelerated by 1.5% in March, with the consumer price index reaching 250.6 points. This scenario is compounded by the recent US-imposed tariffs, which have stirred global market instability, leaving little room for the Central Bank of Egypt (CBE) to maneuver. The upcoming Monetary Policy Committee (MPC) meeting on April 17 is anticipated to maintain current interest rates, as economic policymakers grapple with these inflationary challenges.
