EGYPT- Egypt’s Central Agency for Public Mobilization and Statistics (CAPMAS) has reported a continued decline in urban inflation, dropping from 32.5% in April 2023 to 28.1% in May 2024 amid a significant decline in food prices.
CAPMAS also revealed consumer price index (CPI) declined by 0.7%, compared to the 1.1% increase experienced in April 2023. This decline is the first negative CPI movement since June 2022, indicating significant market recovery.
Core inflation declined by 0.8% for the reported month, compared to the 2.9% decline experienced in May 2023. Annual core inflation declined to 28.1% for the reported month, compared to 31.8% in April 2023, the first time core inflation has dropped below the 30% mark since January 2023.
The reported core inflation decline is attributed to price drops across various food categories. Cereals and bread prices declined by 2.5%, meat, and poultry products declined by 4.6%, fish and seafood products declined by 0.7%, cheese and eggs declined by 3.9%, oils and fat prices declined by 3%, vegetable prices declined by 8.7%, sugar prices declined by 0.6%, ready meal prices dropped by 0.5% while the remaining food categories dropped by 1.7%.
However, fruit prices increased by 12.4%, coffee, tea, and cocoa prices increased by 0.8%, textile prices increased by 1.7%, and other utility prices increased by 0.6%.
CAPMAS predicts a significant reduction in core inflation in the first quarter of next year. The organization suggests Egypt could return to pre-March 2022 inflation rates.
This predicted drop is attributed to Egypt’s stringent monetary policy, unity in the foreign exchange market, improved external financial environment, increased inflow of foreign investment, especially in the food sector, and a boost in Egypt’s foreign exchange reserves. CAPMAS also reports increased demand for Egyptian products in the international market.
In March, Egypt received a US$5 billion loan package from the IMF. A huge prerequisite for the funding was economic reforms, the key among which are economic reforms and changes in financial policies meant to mitigate inflation.
Analysts have predicted a period of sustained economic growth for North Africa owing to these investments and the confidence the market shows the country.
Liked this article? Subscribe to Food Business Africa News, our regular email newsletters with the latest news insights from Africa and the World’s food and agro industry. HERE
