Egypt’s annual urban consumer price inflation soared to its highest level in nearly three years in February, according to estimates released on Thursday by the national statistics agency CAPMAS.
Inflation increased to 8.8% in February from 7.3 percent in January, putting it towards the top end of the central bank’s 5-9 percent goal range and implying that the monetary policy council may raise interest rates when it meets on March 24.
The rate of inflation in February was the highest since June of this year.
In February, food costs increased by 4.6 percent month over month, with vegetable prices increasing by 17.2 percent.
According to Radwa El-Swaify of Pharos Securities Brokerage, prices have been pushed up by a global increase in raw material and commodity costs that has been ongoing since the beginning of 2021.
“Companies had stored up on low-cost goods at the end of 2020 and were using it in 2021. As the cheap stock ran out and they had to acquire at higher costs, they became more vocal about their own price hikes.”
According to Mohamed Abu Basha of EFG Hermes, inflation expectations have risen since Russia’s invasion of Ukraine prompted a dramatic spike in food costs, putting pressure on Egypt’s external accounts.
Soaring oil and food costs precipitated by the Ukraine crisis, according to some analysts, might exacerbate current food security worries in the Middle East and Africa, as well as fuel civil unrest.
Post Your Comments