In September, Egypt’s inflation rate soared to an all-time high of 38%

In September, Egypt experienced an unprecedented surge in inflation, reaching a historic high of 38%, a figure that exceeded expectations, according to Reuters reports.

Data from the statistics agency CAPMAS revealed that the annual urban consumer price inflation, which was 37.4% in August, witnessed a significant increase.

This surge in inflation represents the fourth consecutive month of reaching record highs, as reported on the central bank’s website, which has maintained data records dating back to 2000.

The main factors contributing to this inflationary trend were the rising prices of food and beverages. A poll of 18 analysts had predicted a median forecast of a 37.6% increase in annual urban consumer inflation for September.

Before the inflation spike observed in June, the previous high was recorded at 32.95% in July 2017. On a monthly basis, inflation accelerated, with prices rising by 2.0% in September compared to a 1.6% increase in August, as noted by Allen Sandeep of Naeem Brokerage.

This represents the fastest pace of increase since June. The rapid expansion of the money supply over the past two years played a significant role in these swift price hikes, resulting in nearly a 50% depreciation of the Egyptian currency against the U.S. dollar since March 2022, negatively impacting the living standards of many Egyptians.

In September, the cost of food and beverages saw a significant uptick, with a month-on-month increase of 3.6%. This increase included surges in vegetable prices by 19.2%, fruits by 5.4%, dairy products by 5.4%, and sugar items by 2.9%, according to Sandeep.

In response to the food inflation challenge, the government announced an agreement with private producers and retailers to reduce prices on essential food items by 15-25% and exempt them from customs duties for a six-month period.

Core inflation, which excludes volatile items like food and fuel, declined slightly to 39.7% in September from 40.4% in August, as reported by the central bank.