It's no secret things are getting a bit more expensive. Inflation has been hitting nations around the world — in Egypt, April saw inflation rise to 13.1% as the cost of living and food prices surge. The rate grew at a faster rate than expected, up from 10.5% in March, exceeding a median forecast of 11.8% in a Reuters poll of 17 analysts. Meanwhile, Egypt's central bank target inflation rate is 5-9%.
Inflation has been on the rise in Egypt due to a number of multifaceted challenges; including the Russian war on Ukraine which has affected their wheat supply, the rising prices of food and energy globally, and supply chain disruptions. Data showed that prices of food and beverages inched up by 8.1% in April; clothes and shoes by 3.8%; and housing, electricity, and gas by 1.1%.
Why it matters
Egypt's inflation rate is quite high compared to the ~8% level in the US. As the US Federal Reserve has hiked its benchmark rates by 0.75% (75 basis points) since March, seeing a 2.8% increase in interest rates through the end of 2022 with GCC banks following suit, the accelerating inflation will add pressure on Egypt's central bank to raise interest rates when it meets next week.
