The Central Agency for Public Mobilization and Statistics (CAPMAS) has announced that the annual urban inflation rate declined to 30.6% in April 2023, compared to 32.7% during March 2023.
It indicated, in its monthly report issued on Wednesday, that the monthly urban inflation rate also declined to 1.7% in April, compared to 2.7% in March.
According to the agency, the general index of consumer prices for the whole republic reached 169.6 points for the month of April 2023, recording an increase of 1.8% over the previous month.
The agency attributed the most important reasons for this rise to the increase in the prices of the cereals and bread group by 7.0%, the meat and poultry group by 0.9%, the fish and seafood group by 7.3%, the dairy, cheese and eggs group by -0.2%, the oils and fats group by 0.8%, and the vegetables group by -0.8%. 3.9%, sugar and sugary foods group 1.1%, coffee, tea and cocoa group 2.4%, smoke group 6.1%.
The prices of the textile group also increased by 1.8%, the ready-made clothing group by 4.0%, the cleaning, repair and rental of clothes group by 2.1%, the shoes group by 4.8%, the shoe repair group by 3.0%, the actual housing rent group by 0.7%, the maintenance and house repair group by 1.1%, water and miscellaneous services related to housing by 0.1%, furniture, equipment, carpets and other floor coverings by 1.6%, and household appliances by 2.9%.
The agency indicated that the annual inflation rate for the entire republic was 31.5% in April 2023, compared to 33.9% in the previous March, 14.9% in April 2022.
Moreover, the monthly core inflation, computed by the Central Bank of Egypt, recorded 1.7% in April 2023 compared to 2.4% in the same month of the previous year and 2.5% in March 2023. Accordingly, the annual core inflation rate recorded 38.6% in April 2023, compared to 39.5% in March 2023.
The Central Bank of Egypt said earlier that the restrictive monetary policy is a prerequisite for achieving the target inflation rates of 7% + or – 2% by the end of the fourth quarter of 2024 and 5% + or – 2% by the end of the fourth quarter of 2026.
The Monetary Policy Committee of the CBE decided, in its meeting held on 30 March, to raise the basic return rates at the Central Bank by 2%, to reach 18.25% for deposits, 19.25% for lending, and 18.75% for the credit and discount rate and the price of the main operation at the Central Bank.
The CBE clarified that the widespread rise in inflation requires more monetary restraint, not only to contain inflationary pressures from the demand side, but also to avoid secondary effects that may result from supply shocks, in order to control inflationary expectations of prices.
Hassan Abdullah, Governor of the Central Bank of Egypt, had indicated earlier that Egypt had taken huge measures to mitigate the repercussions of the effects of the Corona pandemic and the Russian-Ukrainian war on the Egyptian economy, and that “we are ready to take further measures.”
Abdullah said, on the sidelines of his participation in the annual spring meetings of the IMF and the World Bank in Washington, that the main focus of the Central Bank of Egypt in the current period is to curb inflation to a range between 5% and 9%, by the fourth quarter of 2026.
He pointed out that the Central Bank was analyzing different models to understand the motives behind inflation figures, and the analysis showed that inflation figures in Egypt were not only driven by commodity prices, but also by supply-side problems such as the recent accumulation of imports (at ports) that resulted from following previous policy.
Abdullah stressed that the central bank did not and will not hesitate to use monetary policy to confront inflation.
The central bank governor noted that since March 2022, Egypt has raised key interest rates and devalued the local currency, “which are important steps.”
Abdullah explained that the Central Bank and the Ministry of Finance have daily coordination between fiscal and monetary policies in order to face the ongoing economic challenges, adding, “We work closely with the Council of Ministers and we have all the support from the political leadership.”