Annual inflation reached 8.2% in May but the rate of inflation slowed by 0.2% compared to April, according to the Central Agency for Public Mobilisation and Statistics (CAPMAS). This was the first decline recorded since the beginning of the year.
Meanwhile, inflation has severely affected the buying and selling trends in Egypt causing a state of “paralysis”, with sales in the country’s food market decreasing 40%, in addition to 70% in the retail market.
Workers in the retail sector say prices for most products have increased significantly in recent months, due to increases in the price of the US dollar. Nearly 60% of goods consumed in Egypt are imported from abroad using foreign currency.
Muhammad Badr, owner of a series of retail shops located throughout Egypt, said buying and selling trends first began to decrease three months ago.
Increases in the price of the dollar helped contribute to the overall increase in the price of goods, he said, sometimes by as much as 40%.
He stated that demand for purchasing has largely been limited to essential goods such as olives, sugar, rice and soap. Despite this, sales for such products have also decreased as prices have gone up.
However, compared to April where prices of several food items increased, including poultry, fish, eggs, soft drinks and more, CAPMAS said the current lower rate will now reduce these prices.
Prices of poultry will be reduced by 0.2% after they increased in April by 2.22%. Prices of fish and seafood will reduce by 2.1% after they accelerated in April by 2.71%.
Egypt, which strongly relies on imports, has been hit hard with a rise in prices for a number of products as its currency depreciates, adding to the problems of rising unemployment, depleted foreign currency reserves and a major fuel shortage.