Egypt’s urban inflation accelerates on surging food prices

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Inflation in urban parts of Egypt accelerated in October to a four year high, pulled ahead by a rise in food prices and reflecting continued pressure from Russia’s invasion of Ukraine.

The inflation rate quickened to 16.2 percent on an annual basis last month compared with 15 percent in September, the state-run statistics agency CAPMAS said on Thursday. Food and beverage costs, which make up the largest single component of the inflation basket, increased by 23.8 percent.

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Monthly inflation was 2.6 percent versus 1.6 percent in September.

Inflation that’s accelerated almost every month this year has underlined the impact of Russia’s invasion of Ukraine on the Arab world’s most populous nation.

Faced with surging food and fuel import bills, Egypt has raced to secure support from its Gulf allies and the International Monetary Fund and devalued its currency twice, in March and late last month.

While the latest figures reflect the pressure the country is facing, they have yet to factor in the effect of the more than 15 percent plunge in the Egyptian pound’s value compared to the US dollar on October 27.

The currency has since depreciated to more than 24 to the dollar for the first time.

Read more: Egypt reveals $16 billion funding gap that IMF deal can help fix

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