Egypt’s annual urban consumer price inflation rose to 13.6% in March, up from 12.8% in February, according to data released by the state’s statistics agency, CAPMAS, on Thursday. This increase was higher than analysts’ expectations, with a Reuters poll predicting inflation would slip to 12.6%.
On a monthly basis, prices were 1.6% higher in March compared to February, with food and beverage prices climbing 3.5%. Annually, food and beverage prices surged by 6.6%, a significant increase from 3.7% in February.
Urban inflation had dropped to 12.8% in February from 24.0% in January, largely due to a statistical base effect as unusually rapid price increases from the past two years were no longer reflected in the data.
Inflation started accelerating following Russia’s invasion of Ukraine in early 2022, which led to a significant withdrawal of foreign investments from Egyptian treasury markets. The Egyptian government responded by printing additional currency to cover its budget deficit.
Headline inflation peaked at a record high of 38.0% in September 2023.
The M2 money supply continued to grow, reaching an all-time high of 33.9% for the year ending February, according to central bank data.
In March 2024, Egypt devalued its currency, raised interest rates by 600 basis points, and signed an $8 billion financial support package with the International Monetary Fund, which helped stabilize the country’s finances.