The Central Agency for Public Mobilization and Statistics (CAPMAS) has announced that the annual urban inflation rose to 32.7% in March 2023, compared to 31.9% in February, marking its highest level since July 2017, when it reached 32.95%. The agency stated, in a statement today, Monday, that the general index of consumer prices for the entire republic amounted to 166.5 points for the month of March 2023, recording an increase of 3.2%, pointing out that the annual inflation rate for the entire republic recorded 33.9% in March 2023 compared to 32.9% in February 2023, compared to 12.1% in March 2022. In addition, the monthly core inflation, computed by the Central Bank of Egypt, recorded 2.5% in March 2023, compared to 3.1% in March 2022 and to 8.1% in February 2023. Accordingly, the annual core inflation rate recorded 39.5% in March 2023, compared to 40.3% in February 2023. CAPMAS pointed out that the Food and Beverages section recorded an increase of 5.3% on a monthly basis, while it recorded an annual increase of 62.7%, and the Alcoholic Beverages and Tobacco section recorded a monthly increase of 0.1% and an annual increase of 12.1%. It added that the clothing and footwear section increased by 1.7% on a monthly basis, while Panama recorded an annual increase of 20.9%, and the housing, water, electricity, gas and fuel section recorded a monthly increase of 0.7% and an annual increase of 8.8%, while the furniture, fixtures, household equipment and maintenance section recorded a monthly increase of 3.8% and an annual rate of 36.4%. The agency continued that the Health Care Department recorded a monthly increase of 1.4% and an annual increase of 17.7%, and the Transport and Communications Department recorded a monthly increase of 2.5% and an annual increase of 21.4%, while the Telecommunications Department recorded a monthly increase of 0.2% and an annual increase of 1.2%. The Department of Culture and Entertainment recorded a monthly increase of 1.5% and an annual increase of 26.1%, while the Restaurants and Hotels Department recorded a monthly increase of 4.6% and an annual increase of 48.2%. The Department of Miscellaneous Goods and Services recorded a monthly increase of 4.8%. The central bank targets inflation at 7% ± 2% in the fourth quarter of 2024 and 5% ± 2% in the fourth quarter of 2026. The Monetary Policy Committee of the Central Bank recently decided to raise the basic return rates at the Central Bank by 2% to reach 18.25% for deposits, 19.25% for lending, and 18.75% for the credit and discount rate and the main transaction rate. In its statement accompanying this decision, the committee said that restricting monetary policy is a prerequisite for achieving targeted inflation rates, stressing that the widespread rise in inflation requires more monetary restriction to contain inflationary pressures from the demand side, and to avoid secondary effects that may result from supply shocks, in order to control price inflation. It explained that the rises in the inflation rate reflect many factors, which include imbalances in the local supply chains, fluctuations in the exchange rate of the Egyptian pound, in addition to pressures on the demand side, which is evident in the developments of real economic activity compared to its maximum production capacity and the rise in the growth rate of domestic liquidity. In addition, the seasonal effect of the month of Ramadan was reflected in the prices of Umrah trips and the prices of food commodities. It stressed that the recent developments in inflation showed a wide rise in consumer price indices, which requires more monetary restraint, not only to contain inflationary pressures from the demand side, but also to avoid secondary effects that may result from supply shocks, in order to control inflationary expectations for prices. It confirmed that it will closely follow all economic developments and will not hesitate to amend its policy in order to achieve the goal of price stability.
