Inflation in urban areas of Egypt has reached its highest level since July 2017, largely driven by a surge in food prices associated with the devaluation of the country's currency. According to state-run statistics agency CAPMAS, consumer prices rose by 32.7% YoY in March, with food and beverage costs up by 62.9%.
However, inflation growth slowed down compared to the previous month, partly due to statistical effects caused by last year's currency declines. Egypt's pound has experienced a recent drop, and this has affected the economy, with fuel price increases and rising demand ahead of the holy month of Ramadan cited as contributing factors.
The government has identified tackling inflation as a priority, with the central bank raising interest rates by 200 basis points on 30 March. Nonetheless, this move is unlikely to provide an immediate solution to Egypt's foreign-exchange crisis. The country is attempting to attract foreign investment, including through a plan to sell stakes in at least 32 companies, in order to address its external funding gap.