Egypt: Headline inflation overshoots market expectations to new all-time high in August
Inflation rose in August, coming in at 37.4%, up from July’s 36.4%. August’s reading, which surprised markets on the upside, marked yet another all-time high and was over four times the upper bound of the Central Bank of Egypt (CBE)’s 5.0–9.0% target band. Looking at the details of the release, the acceleration was driven by stronger increases in prices for food and non-alcoholic beverages, which rose by over 71% year on year. This more than offset prices for transport increasing at a softer pace.
Consequently, the trend pointed up, with annual average inflation coming in at 28.2% in August, up from the prior month’s 26.3%. Meanwhile, core inflation eased for the second consecutive month, slowing to 40.4% in August (July: 40.7%).
Finally, consumer prices increased by 1.58% in August over the previous month, which was below the 1.84% rise seen in July.