The works of the new subsidy policy? Egypt sees biggest monthly inflation since 2008
The inflation rate hit 3.3% during July, the highest month on month rate since 2008, the Central Agency for Public Mobilization and Statistics (CAPMAS) reported Sunday.
The agency attributed the surge to the rising demand for food commoditiessuch as vegetables, dairy products and poultry, and the government’s decision to raise fuel, electricity and tobaccoprices.
Economic experts had expected inflation rates to rise in July after the government’s decision to increase fuel prices, from the stable annual urban inflation rate of 8.2% in May and June.
CAPMAS indicated that rises in the prices of electricity were around 27.9% while the prices of tobacco increased by 16.1%.
Transportation fees exceeded the previous expectations of CAPMAS, which predicted the increase to vary between 2.3% to 7%, but which hiked by 11.2%. This percentage, however, contradicts reports from the Egyptian streetwhich indicate fares climbed by 35% to 50%.
During July, prices for vegetable, fruits, poultry and dairy products inched up by 7.4%, 3%, 4.8% and 4.6% respectively.
The head of Citizens Against Price Rises Association Mahmoud Al-Askalany said that CAPMAS does not reflect reality as “prices of many food products didn’t increase”.
“The presence and the monitoring of the government during the month of Ramadan helped limit the price increases,” Al-Askalany said, adding that “the government helped many exhibitions and offered commodities at discount prices.”
The Ministry of Supply and Internal Trade announced during Ramadan the distribution of food and commodities reduced by 30% at the main three consumer complexes Al-Ahram, Al-Nile and Alexandria.
Al-Askalany said that poultry at some consumer and army food complexes was offered at EGP 14 a kilo, a competitive price that urged merchants to maintain stable prices rather than decrease them.
“I believed that following the increases of fuel prices, we would have a disastrous situation but that didn’t happen,” he added.
The surge in annual urban inflation was at its highest since January 2014, registering 10.7%.
During July, the international foreign reserves inched up, registering $16.73bn compared to $16.678bn at the end of June. During May, foreign reserves amounted to $17.28bn in May and $17.48bn in April.