Egypt's CBE sheds light on high inflation in November 2022

Egypt’s annual headline urban inflation increased to 18.7% in November 2022 from 16.2% in October 2022.November’s inflation was mainly caused by the 27 October local currency devaluation, and the continued repercussions of the Russian-Ukrainian conflict.

Annual food inflation recorded 29.9% in November 2022, which is the highest since November 2017. Non-food inflation also increased for the 12th consecutive month to 13.8%.

Monthly headline urban inflation recorded 2.3% in November 2022, up from 0.1% in November 2021. It was the second highest monthly inflation since 2008, after November 2016’s monthly inflation of 4.8%.

This was mainly driven by food items’ inflation, of which 1.2% is attributed to core food items. Non-food items also contributed to reflect broad-based increases encompassing services, mainly higher expenditure on restaurants and cafes as well as retail items, mainly household appliances, cleaning products, medical products, spare parts, and personal care products, in addition to higher prices of jewelry.

Driven by higher broad-based annual contributions, annual core inflation continued its upward trend that started more than a year ago, to record 21.5% in November 2022, from 19% in October 2022, the highest rate since November 2017.

Monthly core inflation recorded 2.7% in November 2022, compared to 0.5% in November 2021.

Annual inflation in the whole country increased to 19.2% in November 2022 from 16.3% in October 2022. In addition, rural annual inflation increased to 19.6% in November 2022 from 16.3% in October 2022.

Prices of fresh vegetables increased by 7.1%, while prices of fresh fruits declined by 1.4%. Together, they contributed by 0.21% to monthly headline inflation.

Prices of poultry increased by 11.2%, to contribute by 0.46% to monthly headline inflation. Prices of dairy products increased by 4.7%, to contribute by 0.17% to monthly headline inflation. Prices of red meat increased by 2.4%, to contribute by 0.10% to monthly headline inflation. Prices of market rice increased by 5.9%, to contribute by 0.07% to monthly headline inflation. Prices of fish and seafood increased by 3.2%, to contribute by 0.07% to monthly headline inflation. Prices of eggs increased by 3.5% to contribute by 0.05% to monthly headline inflation. Prices of other core food items including other edible oils, market sugar, bread, pasta, among others, increased to contribute by 0.31% to monthly headline inflation.

Moreover, prices of services increased by 1.0%, to contribute by 0.35% to monthly headline inflation. This mainly reflected higher expenditure on restaurants and cafes. Prices of retail items increased by 2.4%, to contribute by 0.33% to monthly headline inflation. This was mainly due to an increase in the prices of medical products and appliances, clothing and footwear, household appliances and cleaning products, jewelry, spare parts, and personal care products. Prices of regulated items increased by 0.7%, to contribute by 0.16% to monthly headline inflation. This was mainly due to the higher prices of medical products, equipment and appliances.

Monthly core inflation was affected by price changes of the aforementioned core CPI items. Core food items contributed by 1.72% to monthly core inflation. Services contributed by 0.48% to monthly core inflation. In addition, retail items contributed by 0.45% to monthly core inflation.