Egypt: Inflation reaches 31.5%

Egypt’s annual urban consumer-price inflation hit a three-decade high in April, adding pressure on the government to lower prices.

Annual urban inflation rose in April to 31.5 per cent from 30.9 per cent in March, the official statistics agency, CAPMAS, said today. The figures are the highest since 30 June 1986 when it reached 35.1 per cent, according to Reuters data.

President Abdel Fattah Al-Sisi is under increasing pressure to revive the economy, keep prices under control and create jobs to avoid a backlash from the public.

Import-dependent Egypt abandoned its currency peg to the US dollar in November last year and since then the currency has depreciated roughly by half, causing prices of goods to soar.

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Floating the pound helped Egypt secure a $12 billion International Monetary Fund loan to support the country’s economic reforms, which include subsidy cuts and introducing a value-added tax.

An IMF delegation is in Cairo to review Egypt’s progress with the reforms, a condition for disbursing the second instalment of the loan programme due in June.

Jihad Azour, the new head of the IMF’s Middle East department, said earlier this month that lowering inflation is key to keeping the country’s economic reform programme on track.

The central bank’s monetary policy committee is due to meet on 21 May to discuss interest rates.