(MENAFN- Daily News Egypt) Egypt's Central Agency for Public Mobilization and Statistics (CAPMAS) said on Tuesday that the annual urban inflation increased for the first time in five months, reaching 26.2% in August 2024, compared to 25.7% in July.
Monthly inflation also climbed to 2.1% in August, up from 0.4% in July.
CAPMAS attributed the acceleration in urban inflation to a significant rise in the prices of vegetables, up by 44.2% year-on-year, and other key food products, including a 55.9% increase in food items, 43.6% in bottled water and natural juices, 28.1% in food and beverages, 32.5% in grains and bread, 21.1% in meat and poultry, 34.7% in dairy, and 29.7% in fruit.
CAPMAS also reported that the overall Consumer Price Index (CPI) for Egypt reached 231.1 points in August 2024, reflecting a monthly inflation rate of 1.9%.
The agency attributed this increase to a rise in several sectors, with vegetable prices increasing by 14.3%, transportation services by 14.9%, postal services by 6%, household appliances by 2.8%, dairy, cheese, and eggs by 2.1%, hospital services by 2.8%, seafood by 1.4%, fruit by 0.9%, and bottled water, soft drinks, and natural juices by 1.7%.
Additionally, the prices of ready-made garments rose by 1.2%, footwear repairs by 1.5%, rent by 0.4%, housing-related services and utilities by 1.2%, electricity, gas, and fuel by 0.4%, and household furnishings by 2.2%.
Medical products and equipment saw a price increase of 4.4%, outpatient services rose by 1.2%, personal transportation costs by 6.1%, newspapers, books, and stationery by 0.7%, organized tours by 2.1%, and personal items by 5.8%.
On the other hand, the prices of tobacco decreased by 0.1%, grains and bread by 1.3%, meat and poultry by 1.5%, oils and fats by 0.9%, and sugar and sugary foods by 0.1%.
CAPMAS also reported that the annual inflation rate for the entire country stood at 25.6% in August 2024, compared to 25.2% in July and 39.7% in August 2023.
The Central Bank of Egypt had previously predicted a significant decrease in inflation during the first quarter of 2025 due to the cumulative impact of monetary tightening policies and the positive base effect.
Following its decision to maintain interest rates last Thursday at 27.25% for deposits, 28.25% for lending, 27.75% for the main operation, and the credit and discount rates, the Monetary Policy Committee stated that inflationary pressures continued to ease as the impact of previous shocks gradually diminishes. While inflation remains high for non-food items, the sharp drop in annual food inflation continues to drive overall inflation downward.
The committee noted that the gradual decline in food inflation, along with improved inflation forecasts, indicates that inflation is currently on a downward trend. The recent slowdown suggests that monthly inflation rates are returning to their usual pattern, driven by recent monetary tightening policies and the waning effects of previous exchange rate and supply shocks.
The committee also forecasted that inflation would remain at similar levels until the fourth quarter of 2024, taking into account the ongoing and expected fiscal adjustment measures.
However, the committee warned that the downward inflation trajectory remains vulnerable to upward risks, including potential declines in global oil supplies, rising regional geopolitical tensions, uncertainties around protective trade policies, and the possibility that fiscal adjustment measures may have a greater impact than anticipated.
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