Egypt's headline inflation surges to new record of 36.5%

investing.com:

CAIRO (Reuters) -Egypt's annual headline inflation rose to a new all-time high of 36.5% in July, in line with analysts' expectations, as food prices soared, data from the country's statistics agency CAPMAS showed on Thursday.

Month-on-month, prices rose 1.9% in July, down from 2.08% in June.

Core inflation, which strips out volatile items like food and fuel, eased slightly to 40.7% in July from 41% in June.

Prices have climbed rapidly during a foreign currency crisis that has triggered three devaluations since March 2022. Many Egyptians have seen their living standards slide.

Headline inflation was 35.7% in June, also a record high.

The median forecast of 15 analysts polled showed annual urban consumer inflation rising to 36.5% in July. The previous high of 32.95% was recorded in July 2017.

Food and beverage prices rose by an annual 68.4% in July, CAPMAS said.

«Food prices were mainly impacted by a 9.1% monthly increase in fruit prices and 4.8% in vegetable prices, which are largely volatile and are excluded from core CPI,» said Sara Saada of CI Capital, which had forecast July inflation of 35.4%.

«We expect inflation to average c.32% in 2023, with possible upside on the continuation of the implementation of deeper fiscal reforms, including possible higher electricity tariffs and approving new telecom tariffs,» she added.

The IMF in December approved a $3 billion, 46-month Extended Fund Facility loan for Egypt after the Ukraine crisis exposed vulnerabilities in its economy.

The first six-month review, scheduled for last March, has been delayed pending the government fulfilling a pledge to adopt a flexible currency exchange rate and to sell more state assets.

Noaman Khalid of NBK said an unfavourable base effect