Egypt’s annual core inflation declines to 35.9% in November 2023: CBE

Hossam Mounir
3 Min Read

The Central Bank of Egypt (CBE) announced Sunday that the monthly core inflation rate, which excludes volatile items such as food and energy, recorded 1% in November 2023, down from 2.7% in the same month of the previous year and 1.8% in October 2023. Accordingly, the annual core inflation declined to 35.9% in November 2023, compared to 38.1% in October 2023.

Additionally, the Central Agency for Public Mobilization and Statistics (CAPMAS) on Sunday announced a decrease in Egypt’s annual urban inflation to 34.6% in November 2023, down from 35.8% in October. Additionally, the monthly inflation rate also saw a reduction to 0.9%, compared to the previous month’s 1%.

In a statement released on Sunday, CAPMAS reported that the national consumer price index reached 191.8 points in November, indicating an annual inflation rate of 36.4%, a decline from 38.5% in October.

This downward trend is attributed to price reductions in several categories: meat and poultry: 1.5%, fruits: 3.5%, vegetables: 4.7%, transportation services: 2.3%, and hotel services: 0.3%. 

Conversely, there were price increases in other sectors: cereals and bread: 5.2%, fish and seafood: 0.1%, dairy, cheese, and eggs: 2.7%, oils and fats: 1.0%, sugar and sugary foods: 5.9%, and tobacco: 11.7%.

Additional increases were observed in textiles: 2.2%, ready-made clothing: 1.7%, cleaning, repair, and clothing rental: 0.7%, shoes: 0.6%, vehicle purchase: 1.2%, private transportation expenditure: 6.2%, cultural services and entertainment: 0.1%, and newspapers, books, and stationery: 0.3%.

The Monetary Policy Committee of the CBE will convene on 21 December for its final meeting of 2023. The committee will deliberate on the central bank’s key interest rates, which significantly influence short-term interest rates for the Egyptian pound.

On 2 November 2023, the committee resolved to maintain the current rates, setting them at 19.25% for deposits, 20.25% for lending, and 19.75% for credit, discount rates, and the CBE’s main operations.

The committee emphasized that its decisions on basic interest rates are guided by anticipated inflation rates rather than current rates. It remains vigilant of economic developments and the potential risks to inflation expectations.

Furthermore, the committee reaffirmed its commitment to employing all available monetary policy instruments to sustain restrictive monetary conditions. This approach aims to achieve targeted inflation rates of 7% (±2%) on average in Q4 2024 and 5% (±2%) on average in Q4 2026. The impact of the stringent monetary policy and its effects on the economy will continue to be assessed based on incoming data.

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