Egypt: Inflation skyrockets to multi-decades high in January
February 12, 2017
In January, consumer prices rose a hefty 4.1% from the previous month. The increase was above the 3.1% expansion in December. Inflationary pressures are mounting on the back of spillovers from the flotation of the Egyptian pound, hikes on administered prices and higher costs for energy.
Inflation came in at 28.1% in January. The reading was well above December’s 23.3% and was the highest since December 1989. Since the pound was floated on 3 November in compliance with IMF demands for the granting of a USD 12.0 billion loan, the value of the Egyptian currency against the U.S. dollar has more than halved. In turn, prices for imported goods and internationally-priced local commodities have gone up dramatically, which, coupled with the scrapping of fuel subsidies and a new Value-added Tax, is hurting Egyptians’ purchasing power.
Annual average inflation rose from 13.7% in December to 15.3% in January, reaching the highest figure in over seven years.
Author: David Ampudia, Economist