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Egypt: Inflation hits record high of 36.8%

July 10, 2023 at 1:13 pm

A man counts Egyptian pounds at currency exchange shop in downtown Cairo on 3 November 2016 [KHALED DESOUKI/AFP/Getty Images]

Official data shows that Egypt’s annual inflation rate hit a record high in June at 36.8 per cent, up from 33.7 per cent in May, as the country continues to face an economic crisis.

Egyptians have been grappling with price rises for months and many citizens are struggling to buy basic food products like fruit and meat, and other essential items like medicine.

In March, Carnegie reported that food prices had jumped by 14.4 per cent month on month and 61.8 per cent annually.

Around a third of Egyptians already live below the poverty line and the increase in food prices will place further stress on these households.

Russia’s invasion of Ukraine has sparked a wave of inflation across the world as it destabilised food imports.

READ: Russia detains Egyptian citizen who desecrated Quran 

The war squeezed the supply of energy and food, pushing prices up to unprecedented levels, and exacerbated inflationary pressures already in place post pandemic.

Globally, food costs were reducing, but Egypt has raised the prices of some subsidised products like rice, sugar and domestic diesel prices, reports Bloomberg, which added to the crisis.

Over the past year, Egypt has devalued the pound and secured a $3 billion loan from the International Monetary Fund.

The country has been rocked by political unrest for years, including the downfall of Hosni Mubarak in 2011 and the coup in 2013, after which thousands of Egyptians were arrested.

In 2016 the government rolled out an austerity programme which included unpopular measures like slashing fuel, water and electricity subsidies.

In 2017 inflation stood at a previous record high, 34.2 per cent, after the government devalued the currency and received a bailout from the IMF.

Adding to the crisis is the fact that unemployment and national debt have both increased over the last few years. Investors have withdrawn billions of foreign reserves.