Egyptian Inflation Soars to 39.7%

Egypt’s annual inflation rate hit a new record high in August, as the cash-strapped country continues to battle price hikes and a depreciating currency, the Egyptian statistics bureau said Sunday.

The nation's annual inflation rate reached 39.7% last month, up from 38.2% recorded in July, according to data released by the state-run Central Agency for Mobilization and Statistics. On a monthly basis, prices grew 1.6% last month, down slightly from a 1.9% rise in July.

Prices in Egypt rose across multiple sectors amid the Russia-Ukraine war, from food items and medical services to housing and furniture, part of a wave of inflation unleashed across the globe.

The country's inflation rate in August more than doubled compared to the same month last year, when it recorded 15.3% increase. The latest surge is compounded by economic pressures, a shortage of foreign currency and successive devaluation of the Egyptian pound.

The figures released Sunday showed that Egyptian food prices, the nation's main driver of inflation, rose by over 70% in August compared to the same month in 2022. Grains, meat, poultry, fish, and fruit were among the products with the biggest price spikes.

The Egyptian pound has lost more than 50% of its value against the dollar since the Russian war on Ukraine broke out in February 2022, adding further burdens on millions of Egyptians whose savings are running low as the cost of living surges. Some 27.3% of of Egyptians live below the poverty line, making less than the equivalent of $169.12 per year, according to Saifaddin Galal of Statista.

Egypt, the most populous Arab country with a population of over 105 million, was the world’s largest importer of wheat as of 2021, when it purchased $4.35 billion in wheat, mostly from Russia, according to the Observatory of Economic Complexity. The country's imports of wheat fell to an eight-year low of 10.5 million metric tons from July 2022 to June 2023 due to Russia's war in Ukraine, and are expected to tick up 3% in the 2023 to 2024 marketing year, according to the U.S. Department of Agriculture.