CAIRO (AP): Inflation in Egypt again hit a new high for this year in February, the government said Thursday, with prices rising most steeply for food. The country is in the midst of an economic crisis and a currency depreciation.
Annual inflation rose to 32.9% in February, the government statistics agency said, up from 26.5% in January. Grains, meat, poultry, fish and fruit were among the products with the biggest price spikes.
The statement added that food prices have increased 61.5% since the same time last year.
Egyptians, a nearly a third of whom live in poverty according to official figures, have been striving to keep up with increasing prices since last year, after Russia’s invasion of Ukraine sparked worldwide inflation. The country is the world’s largest wheat importer, with most of its imports having traditionally come from eastern Europe.
The war in Ukraine came after years of government austerity in Egypt, the coronavirus pandemic and more than a decade of disruptions to the Mideast nation’s economy. In 2016, Egyptian President Abdel Fattah el-Sissi’s government launched a reform program aimed at reversing longstanding distortions in the economy in return for loans from the International Monetary Fund.
To try to curb the economic turmoil, Egypt secured the latest financial help, a $3 billion bailout loan from the IMF, last December. In return, el-Sissi’s government committed to various IMF-guided economic reforms, including a free-floating exchange rate for the Egyptian pound and a reduction in fuel subsidies.
The country’s currency is now trading at more than 30 Egyptian pounds to the dollar, a more than 50% loss of value since this time last year.
Earlier this month, the government raised the price of some types of gasoline in a move that will likely further push up the prices of other goods and services.
To try to alleviate the burdens on normal Egyptians, the government has set up markets selling basic goods for cheaper prices and increased public servants’ pay. On March 3, el-Sissi announced that government employees would receive pay increases of 1,000 Egyptian pounds a month (roughly $32).