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New Record Inflation Levels Reached in Egypt


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In February, the rate of core inflation in Egypt exceeded all expectations and amounted to 40.26 percent year on year, the highest level in its history.

The core inflation rate, which excludes commodities such as fruits and vegetables due to wild fluctuations in their prices, stood at 31.24 percent in January. It was expected to rise to 32.85 percent in February, according to a Reuters poll of economists.

The central bank said in a statement Thursday that core inflation rose at a monthly rate of 8.1 percent in February 2023, compared with 6.3 percent in January.

And data from the Egyptian Central Agency for Public Mobilization and Statistics showed that annual consumer price inflation in Egyptian cities jumped more-than-expected to 31.9 percent in February, the highest level in five and a half years, from 25.8 percent in January. .

Spiraling inflation follows a series of currency devaluations that began in March 2022 amid a longstanding foreign exchange deficit and persistent delays in imports into the country.

The Egyptian pound has fallen about 50 percent since March last year.

Headline inflation in February reached its highest level since August 2017, when it reached 31.92 percent, nine months after another sharp devaluation.

Economists had expected inflation to hit 26.7 percent, according to the median forecast from a Reuters poll of 14 experts.

Higher inflation in February increases pressure on the central bank’s monetary policy committee to raise interest rates at its March 30 meeting.

At its previous meeting on February 2, the committee kept the lending rate at 17.25% and the deposit rate at 16.25%, saying an 800 basis point increase over the past year would help curb inflation.

Source: agencies

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