Inflation in Egypt accelerates to reach 38% in September

 Inflation in Egypt accelerates to reach 38% in September

Inflation in Egypt

Egypt, the land of ancient wonders, is once again in the spotlight, but this time, it's not pyramids or pharaohs making headlines. It's the soaring rates of inflation that have captured our attention. In September, Egypt witnessed a historic high, with annual urban consumer price inflation surging to a staggering 38.0%. In this article, we'll delve into the causes and consequences of this economic upheaval, as well as the government's efforts to tackle it.

The Unveiling Statistics:

Let's start with the numbers. The data from Egypt's statistics agency, CAPMAS, sent shockwaves through the country. In September, inflation rose from 37.4% in August, defying analyst expectations. This marked the fourth consecutive month of record highs.

Food's Leading Role:

Food and drink prices took center stage in this economic drama. They played a pivotal role in driving up inflation. Inflation soared, and the median forecast of analysts was surpassed, reaching 37.6% in September. This is a far cry from the 32.95% recorded in July 2017, before inflation took flight in June.

Monthly Madness:

The monthly statistics were equally alarming. Prices surged by 2.0% in September, compared to a 1.6% increase in August. This rapid rise was a record pace since June.

Money Matters:

Rapid money supply growth over the last two years was a catalyst for this economic turmoil. This surge in money supply not only sent prices skyrocketing but also devalued the Egyptian currency, which has lost nearly half its value against the U.S. dollar since March 2022. Consequently, many Egyptians experienced a significant decline in their living standards.

The Grocery List:

In September, food and beverage prices witnessed shocking spikes. Vegetables soared by 19.2%, fruits by 5.4%, dairy products by 5.4%, and sugar items by 2.9%. The burden on the average Egyptian's grocery bill was heavier than ever.

The Government's Response:

In response to this crisis, the Egyptian government announced measures to combat food inflation. They have reached agreements with private producers and retailers to cut prices on staple foods by 15-25%. Additionally, these staple foods have been exempted from customs duties for six months.

A Glimmer of Hope:

Amidst this turbulent sea of inflation, there's a faint glimmer of hope. Core inflation, which excludes volatile items like food and fuel, slightly retreated to 39.7% from 40.4% in August. The Central Bank, in its statement, expressed cautious optimism.

Egypt finds itself in a challenging economic situation, with inflation rates reaching historic highs. The root causes, from rapid money supply growth to the devaluation of the currency, have left many Egyptians struggling to make ends meet. While the government is taking steps to address this crisis, only time will tell if these measures will be enough to stabilize the situation.