The Central Bank of Egypt (CBE) announced, on Monday, the commodity price developments in the markets during February 2021, which has in turn affected headline and core inflation during the month.
Egypt’s annual headline urban inflation increased to 4.5% in February 2021, up from 4.3% in January 2021. This comes as monthly headline urban inflation recorded 0.2% in February 2021, compared to zero in February 2020.
The monthly headline urban inflation in February 2021 was driven by higher prices of non-food items, which mainly reflected the higher prices of tobacco, rental values, and haircuts. It was more than offset by the seasonally lower prices of clothing.
On the other hand, the decline in food prices contributed only marginally to monthly headline inflation, as lower prices of volatile food items more than offset the higher prices of core food items.
Accordingly, the annual increase in February 2021 was mainly driven by the higher annual contribution of non-food items. This came as annual non-food inflation increased to the 6.6% recorded in November and December 2020, after it had declined to 6.4% in January 2021.
Meanwhile, annual food inflation remained broadly stable at -0.5% for the second consecutive month, after it had declined in January 2021 from 2.8% in December 2020.
Against this background, monthly core inflation recorded 0.3% in February 2021, compared to 0.2% in February 2020. Meanwhile, annual core inflation remained stable at 3.6% in February 2021, for the second consecutive month.
Nationwide annual inflation increased to 4.9% in February 2021 from 4.8% in January 2021. Meanwhile, rural annual inflation remained stable at 5.3% in February 2021.
Prices of fresh vegetables declined for the third consecutive month by 4.0%, while prices of fresh fruits declined by 0.7% for the first time in three months. Together, fresh vegetables and fresh fruits contributed by -0.13% to monthly headline inflation.
Prices of poultry increased for the third consecutive month by 1.1%, to contribute by 0.04% to monthly headline inflation.
Prices of eggs increased for the second consecutive month by 1.9% to contribute by 0.02% to monthly headline inflation.
Prices of other core food items, including cheese, pasta, oils and fats, increased to contribute by 0.06% to monthly headline inflation.
Prices of regulated items increased by 0.4% to contribute by 0.09% to monthly headline inflation. This was due to higher prices of tobacco products.
Prices of services increased by 0.3%, to contribute by 0.11% to monthly headline inflation. This was mainly due to higher prices of rental values of occupied housing, haircuts as well as cafes and restaurants.
Prices of retail items declined by 0.3%, to contribute by -0.04% to monthly headline inflation. This was mainly due to seasonally lower prices of clothing items. Monthly core inflation was affected by price changes of the above core CPI items.
Core food items and services contributed by 0.16% and 0.15% to monthly core inflation, respectively.
Meanwhile, retail items contributed by -0.05% to monthly core inflation.