Egypt’s annual headline inflation rose to 29.6 percent in January from 24.3 percent in the previous month, hitting its highest level after the country freely floated its currency against the dollar in November, state statistics body CAPMAS announced Saturday.
Annual headline inflation was registered at 10.7 percent in January 2016. In an emailed statement today, CAPMAS attributed the spike in inflation to price hikes in basic goods and services. The cost of foodstuffs and beverages rose by seven percent in January 2017 compared to November 2016 and 38.6 percent year-on-year.
Egypt’s annual core inflation registered 25.86 percent in December from 20.73 percent in November, the Central Bank of Egypt (CBE) announced in early January. The core consumer price index that the CBE uses to measure the level of prices – after excluding volatile cost commodities such fruits and vegetables – started to hit double-digits in May 2016, when it recorded a seven-year-high rate of 12.2 percent. The CBE decided in early November to float the pound against the dollar and raise key interest rates as part of a set of reforms aiming to revive the country’s flagging economy.
In July 2014, Egypt embarked on a fiscal reform programme in an attempt to curb a growing state budget deficit — now 12.2 percent of the GDP — by cutting subsidies and introducing new taxes, including the value added tax.
Egypt’s economy has been struggling since the 2011 uprising, with a sharp drop in tourism and foreign investment, two main sources of hard currency for the import-dependent country.
