President warns of ‘difficult’ times as inflation rises in Egypt
Egypt continues to battle surging inflation amid a dramatic slide of its currency as many Egyptians struggle with price hikes, the country’s statistics bureau has said.
The state-run Central Agency for Public Mobilization and Statistics (CAPMAS) released figures on Tuesday showing that the annual inflation was at 21.9 percent last month, up from 19.2 percent in November. That is compared with 6.5 percent in December 2021, before inflation ballooned in 2022, following the outbreak of Russia’s war on Ukraine that rattled the world economy.
Prices in Egypt rose across many sectors, from food items and medical services to housing and furniture.
“Food and beverages were up 4.6 percent month-on-month (adding to the 4.5 percent in November), impacted mainly by bread and cereals, dairy, vegetables and meat,” said Allen Sandeep of Naeem Brokerage.
The economy was also hit hard by the coronavirus pandemic and the fallout from the war in Ukraine. Egypt is the world’s largest wheat importer, with most of its imports having traditionally come from Eastern Europe.
‘Very difficult’
On Monday, President Abdel Fattah el-Sisi described the situation as “very difficult”, urging people to trust his administration.
The government has sought to curb state spending, halted the implementation of costly new projects that consume foreign currency, and ordered state agencies to embark on austerity measures.
Decisions in recent months by the Central Bank of Egypt (CBE) to raise its main interest rate and devalue the pound have set off an economic shock that hit millions who found their savings running low as the cost of living surged.
The measures were meant to fight increasing inflation and meet the requirements of the International Monetary Fund for a bailout loan amid a shortage of foreign currency.
Last month, CBE announced it aims to bring down inflation to about 7 percent by the fourth quarter of 2024, though it was not clear how that would happen amid the current trends.
The IMF approved the $3bn support package for Egypt after a series of reforms, including devaluation.
The US currency traded on Tuesday at 27.5 pounds for $1.
