Egypt inflation surges to 19.4 percent at eight-year high
Cairo abandoned its peg to the US dollar on Nov. 3, in a move that has since seen its currencyroughly halve in value
Egypt’s headline inflation surged to an eight-year high of 19.4 percent in November, in the first report on price rises since the central bank floated the currency and hiked fuel prices last month.
Annual urban consumer price inflation jumped from 13.6 percent in October, the official CAPMAS statistics agency said in a statement, to reach its highest level since Nov. 2008, when it exceeded 20 percent.
CAPMAS said food and beverage inflation reached 21.5 percent in November, an eyewatering number for tens of millions of Egyptians who scrape by day to day.
Egypt abandoned its peg of 8.8 Egyptian pounds to the US dollar on Nov. 3, floating the currency in a dramatic move that has since seen it roughly halve in value.
The move helped Egypt secure a $12 billion three-year loan from the International Monetary Fund to support an economic reform program that has seen the government introduce Value Added Tax, cut electricity subsidies and sharply raise import duties all the space of a few months.
The measures have had the effect of reducing imports and dramatically increasing prices in the country of more than 90 million.
Economists have forecast inflation of up to 20 percent by year-end on the back of the currency depreciation. They expect prices to keep rising into next year.
“The inflation rate will continue to rise in December and the first quarter of 2017. Don’t forget that the government
hiked customs tariffs this month,” said Reham El Desoki, senior economist at regional investment bank Arqaam Capital.
Egyptian officials have sought to reassure the poor that they would be shielded from the worst effects of soaring prices
as public anger simmers.
The government has expanded its social security network and some 70 million Egyptians have access to state subsidized bread and other basics.