Annual urban inflation in Egypt reached 32.7% in March, the highest level since 2017, according to data released on Monday by the national statistics agency CAPMAS. The rise has been fueled by a sharp rise in food prices as well as the depreciation of the Egyptian pound.
Consumer prices rose by less than economists predicted, but remained higher than the 31.9% increase recorded in February, led by a 62.9% increase in food and beverage prices.
Monthly urban inflation fell to 2.7% in March, down from 6.5% in February and 4.7% in January.
Prices have risen due to a drop in the national currency following a series of devaluations over the last year. Soaring consumer prices were also blamed on increased seasonal demand during Ramadan, high fuel prices and a shortage of raw materials, as well as a lack of foreign currency.
Egypt, a major commodity importer, has devalued its currency three times since last March, raising the prices of most foreign goods.
Inflation has taken a toll on Egyptian households, as half of the country’s 104 million people live near or below the poverty line.
In an effort to keep prices in check, the Egyptian central bank raised interest rates by 200 basis points in March, though analysts are skeptical that the measure will provide immediate relief.
As the country’s financial system is under pressure, authorities are looking for ways to increase foreign investment, including plans to sell stakes in a number of domestic companies.
