Egypt Inflation Rate

The annual urban inflation rate in Egypt slowed to 33.3% in March 2024, from a four-month high of 35.7% in the previous month and missing market forecasts of 36.3%. Downward pressure mainly came from food (45% vs 50.9% in February), transport (16.2% vs 17.6%) add housing (9.7% vs 10%). Meanwhile, Cairo metro ticket prices saw an increase of up to 20%, while internet service fees surged by as much as 33%, and electricity tariffs rose by up to 26%. However, to mitigate the impact of these price hikes and address the pressing cost of living crisis, the government also introduced a substantial 50% raise in the minimum wage, setting it at 6,000 Egyptian pounds, effective from March. On a monthly basis, consumer prices rose 1% in March, sharply decelerating from 11.4% in the prior month.

The annual urban inflation rate in Egypt accelerated for the first time in five months to 35.7% in February 2024 from January's 12-month low of 29.8% and far above forecasts of 25.1%. It was the highest inflation rate since last October, with food prices soaring by 50.9%, transport (17.6%) and housing by 10% after the government increased Cairo metro ticket prices by up to 20% in January, internet services (33%), and electricity prices (26%). The government also announced a 50% hike to the minimum wage to 6,000 pounds to take effect in March, with salaries to be raised by a minimum of 1,000 to 1,200 Egyptian pounds to address the cost of living crisis. Last Tuesday, Egypt's central bank raised interest rates by 600 bps, following a 200 bps hike in February, to accelerate the monetary tightening process to fast-track the disinflation path and ensure a decline in underlying inflation. Monthly, CPI surged by 11.4% in February, the highest on record, jumping from a 1.6% rise in January.

The annual urban inflation rate in Egypt eased for the fourth consecutive month to a one-year low of 29.8% in January 2024 from 33.7% in December, falling below market expectations of 32.5%. However, it remains well above the upper limit of the central bank's target range of 5-9%. Monthly, consumer prices inched up by 1.6% in January, the most in five months, after a 1.4% rise in the prior month. The government in January increased the price of Cairo metro tickets by up to 20%, internet services by as much as 33% and electricity prices by as much as 26%. Meanwhile, Egyptian President Abdel Fattah al-Sisi announced a 50% raise to the minimum wage to 6,000 pounds to take effect in March, as part of a 180 billion pound "urgent social protection package". He additionally ordered all government monthly salaries to be raised by a minimum of 1,000 to 1,200 Egyptian pounds to address the cost of living crisis.