The Central Bank of Egypt (CBE) reports that annual urban headline inflation decreased to 32.5% in April 2024, down from 33.3% in March. This reduction is attributed to the reversal of the rising trend in annual food inflation that began in 2021, coupled with a favourable base effect.

April’s annual food inflation rate slowed to 40.5%, the lowest since December 2022, following a peak of 73.6% in September 2023. The decline is primarily due to a decrease in core food prices. Conversely, annual non-food inflation rose to 27.3% in April, up from 25.7% in March, influenced by the Fuel Automatic Pricing Committee’s (FAPC) fuel price adjustments on 22 March 2024.

Annual core inflation decelerated to 31.8% in April from 33.7% in March, reflecting a reduced impact from core food prices. Monthly core inflation was recorded at 0.3% in April, a decrease from 1.7% in the same month of the previous year.

April’s monthly urban headline inflation was 1.1%, compared to 1.7% in the same month last year and 1.0% in March. The subdued inflation in March and April, relative to February’s significant 11.4% inflation, indicates a normalisation of inflationary trends.

Contributing Factors

A notable decline in monthly core food prices, the steepest in nearly four years, contributed to the downward pressure on monthly headline inflation. However, this was counterbalanced by price increases in non-food items, including regulated items like fuel and tobacco, retail items such as clothing and footwear, and services, particularly inland transportation and dining expenses.

Annual rural headline inflation decreased to 31.2% in April from 32.8% in March. Similarly, annual nationwide headline inflation dropped to 31.8% in April from 33.1% in March.

Price Fluctuations

  • Fresh fruits and vegetables saw a 2.1% price increase, contributing 0.12% to monthly headline inflation.
  • Poultry and red meat prices fell by 4.2% and 0.1%, respectively, deducting 0.30% from monthly headline inflation.
  • Market rice, pulses, and edible oils decreased by 7.3%, 9.4%, and 7.6%, respectively, reducing monthly headline inflation by 0.26%.
  • Unsubsidized bread prices dropped by 4.4%, the first decline in two years, subtracting 0.03% from monthly headline inflation.
  • Other core food items, including fish, seafood, dairy, eggs, tea, coffee, and fats, added 0.07% to monthly headline inflation.
  • Service prices rose by 1.3%, contributing 0.36% to monthly headline inflation, driven by higher costs in restaurants, cafes, and inland transportation.
  • Retail item prices increased by 3.0%, adding 0.39% to monthly headline inflation, primarily due to clothing, footwear, and personal care products.
  • Regulated item prices climbed by 3.7%, contributing 0.71% to monthly headline inflation, led by fuel and tobacco price hikes.

Changes in core CPI items influenced monthly core inflation:

  • Core food items reduced monthly core inflation by 0.68%.
  • Services added 0.48% to monthly core inflation.
  • Retail items increased monthly core inflation by 0.51%.

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