Egypt Inflation Rate at 4-Month High

The annual urban inflation rate in Egypt accelerated sharply to 35.7% in February 2024, the first increase in five months, from January's 12-month low of 29.8%, and far above market expectations of 25.1%.

It was the highest inflation rate since last October after the government in January increased the price of Cairo metro tickets by up to 20%, internet services by as much as 33%, and electricity prices by as much as 26%.

The government also announced a 50% raise to the minimum wage to 6,000 pounds to take effect in March, with salaries to be raised by a minimum of 1,000 to 1,200 Egyptian pounds to address the cost of living crisis.

Last Tuesday, Egypt's central bank raised interest rates by 600 bps, following a 200 bps hike in February to accelerate the monetary tightening process to fast-track the disinflation path and ensure a decline in underlying inflation.

Monthly, consumer prices surged by 11.4% in February, the highest on record, jumping from a 1.6% rise in the prior month.