Egypt’s annual core inflation jumps 24.40% in December: CBE

Core inflation, which strips out volatile items such as food and fuel, rose to 24.4% y-o-y in December from 21.5% a month earlier, according to Central Bank of Egypt figures. It is the highest percentage since November 2017 and the 16th month in a row that core inflation has accelerated.

The hospitality sector was hit particularly hard, with prices rising 33.2% y-o-y. Clothing and footwear prices were up 16.5% y-o-y while healthcare costs rose 12.3%.

However, the monthly inflation dipped to 2.1% in December, down from 2.3% in November.

The upturn was driven by a myriad of problems:

 Successive currency devaluations, the fallout from the war in Ukraine, and import restrictions all played a part. The Central Bank of Egypt has allowed the EGP to devalue three times in less than a year as part of its agreement with the IMF to move towards a permanently flexible exchange rate. The EGP has fallen 75.6% against the greenback since the first devaluation in March, and is down 11.7% since last week when the central bank allowed the currency to depreciate further.

A long way from target: The central bank is currently targeting an inflation rate of 7% (± 2%) by 4Q 2024.

On the other hand, the Arab state's annual headline inflation rate rose to 21.90% in December 2022, compared to 6.50% in the corresponding month a year earlier, according to recent data by the Central Agency for Public Mobilization and Statistics (CAPMAS),

The country’s monthly CPI recorded 143.60 points in December, up by 2.10% from the previous month