The Central Bank of Egypt (CBE) said that annual headline urban inflation increased to 37.4% in August 2023, up from 36.5% in July 2023. This was mainly driven by food inflation, which rose to 71.4% in August 2023, up from 68.4% in July 2023.
However, annual core inflation, which excludes volatile items such as food and regulated items, witnessed a slight slowdown for the second consecutive month, to 40.4% in August 2023, from 40.7% in July 2023. This was in line with monthly core inflation recording 0.3% in August 2023, compared to 0.6% during the same month last year.
Monthly headline urban inflation recorded 1.6% in August 2023, compared to 0.9% during the same month last year.
Food prices affected by seasonal and weather factors
The CBE said that monthly food inflation increased, driven by volatile foods, which reflected the typical seasonal behavior of fresh fruits and vegetables but was further amplified by adverse weather conditions.
Prices of fresh fruits and vegetables increased by 7.3% and 26.2%, respectively. Together, they contributed by 1.04% to monthly headline inflation. This was mainly due to the higher prices of tomatoes, onions, and potatoes.
Prices of dairy products and eggs increased by 4.1% and 1.0%, respectively, contributing 0.19% to monthly headline inflation.
Prices of red meat and poultry declined by 0.5% and 5.2%, respectively, contributing by negative 0.35% to monthly headline inflation.
Prices of market rice declined by 4.1%, for the third consecutive month, contributing by negative 0.07% to monthly headline inflation.
Prices of other core food items including fish & seafood, sugar, tea, and pulses, among others, increased to contribute by 0.15% to monthly headline inflation.
Non-food prices influenced by tobacco and household items
The CBE said that non-food inflation continued to be driven by an increase in tobacco prices (for the fifth consecutive month), household cleaning products, and rentals.
Prices of regulated items increased by 1.4%, contributing by 0.29% to monthly headline inflation.
Prices of retail items increased by 1.7%, contributing by 0.22% to monthly headline inflation.
Prices of services increased by 0.4%, contributing by 0.11% to monthly headline inflation.
Monthly core inflation was affected by price changes of the aforementioned core CPI items. Retail items and services contributed by 0.29 and 0.14% to monthly core inflation, respectively, while core food items contributed by negative 0.09%.
Rural and nationwide inflation increase
The CBE reported that rural annual inflation increased to a record 41.9% in August 2023, from 40.0% in July 2023.
Additionally, nationwide annual inflation increased to 39.7% in August 2023, from 38.2% in July 2023.