ALBAWABA – Inflation in Egypt increased to 32.7 percent in May, after having decelerated to 30.6 percent in April, according to a statement Saturday from the Central Agency for Public Mobilization and Statistics (CAPMAS).
But Egypt’s core inflation rose to 40.3 percent in May from 38.6 percent in April, data from the central bank showed on Sunday.
Inflation in Egypt tripled over the duration of a year after Egypt devalued their national currency to secure $3 billion from the International Monetary Fund (IMF).
Despite the recent decline in global food prices, the government of Egypt recently raised the prices of some subsidized commodities, including rice and sugar, Bloomberg reported.
As a result, food and beverage costs, the single largest component of the inflation basket, rose 60 percent, CAPMAS said.
Inflation in Egypt is also a risk of being further accelerated by currency depreciation.
Imports have been more costly for Egypt, in light of rising interest rates worldwide.
Headline inflation may climb to almost 37 percent in the third quarter of the year 2023, Farouk Soussa, an economist at Goldman Sachs Group Inc., told Bloomberg.
The central bank targets inflation in Egypt at around 7 percent by the fourth quarter of next year.
The Monetary Policy Committee kept its key interest rate unchanged at 18.25 percent last month as a slight slowdown in inflation for April.
Governor Hassan Abdalla recently signaled higher rates could do little to contain inflation that he described as stoked mainly by supply issues, according to Bloomberg.
