Back to the complete issue
Monday, 11 May 2020

Egypt’s inflation rises in April to 5.9%, ahead of expectations

Annual urban inflation in April outpaced analyst expectations, rising to 5.9% from 5.1% in March, according to data out on Sunday from state statistics agency Capmas. Inflation came in at 1.6% on a monthly basis compared to 0.4% during the same month last year, and 0.6% in March. This uptick comes on the heels of a steady price deflation over the two previous months.

Food and beverage prices were the main drivers: The prices for food and beverages rose 4.4 percentage points in April to register an overall increase of 0.9% on an annual basis. Prices are typically driven up by high demand in the run-up to Ramadan. Alcoholic beverages and tobacco products saw their prices increase by 1.1%, to record an annual increase of 8.3%. Transport costs dropped 1.0%, good for an annual rate of 12.2%.

Inflation higher than expected? “We expected a surge in Ramadan but the rate of increase is higher than we had anticipated. In the two weeks preceding the holy month, there was a lot of buying activity and a demand push across the board,” head of research at Naeem Brokerage Allen Sandeep told Reuters. “We could possibly see some easing in May.”

Covid effect? Ramadan demand pushed costs up, but we expect covid-induced hoarding of food and other necessities could also have played a role.

Core inflation also rose: Annual core inflation increased to 2.5% in April, while monthly core prices rose 0.6% from the month before, according to figures released by the Central Bank of Egypt (pdf).

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Etisalat Misr (tax ID: 235-071-579), the leading telecoms provider in Egypt; and Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt.