The Central Bank of Egypt (CBE) has announced that annual headline inflation increased due to a combination of unfavourable base effects due to higher price increases in April.
The CBE said the increase stemmed from muted price increases in April 2019 but higher price increases in April, due to the impact of the coronavirus (COVID-19) pandemic and the arrival of Ramadan.
Annual headline urban inflation increased to 5.9% in April, up from 5.1% in the previous month, as monthly headline inflation recorded 1.3% in April 2020 compared to 0.5% in April 2019.
The CBE added that annual food inflation increased in April 2020, after declining over two consecutive months. This was mainly due to the higher contribution of core food items, and to a lesser extent volatile food items.
Meanwhile, annual non-food inflation declined in April 2020, mainly due to the lower contribution of services and regulated items.
The CBE added that monthly core inflation recorded 1% in April 2020 compared to 0.4% in April 2019, with annual core inflation increasing to 2.5% in April 2020 from 1.9% in March 2020.
“Accordingly, the increase of annual headline inflation was driven by higher annual food contribution, mainly core food items, which offset lower contribution of non-food items,” the CBE noted.
It noted that monthly headline urban inflation reflected higher prices on a range of items. These include higher core food item prices, mainly due to higher meat, poultry and seafood prices; seasonally higher prices of volatile food items; higher prices of services items mainly due to higher rental prices; and higher prices of retail items mainly due to higher prices of cleaning products.
Monthly headline urban inflation has also been affected by seasonally higher prices of clothing and footwear, and lower prices of some fuel products as announced by the automatic pricing committee.
It also noted that fresh vegetable prices increased by 9.17% after declining against their seasonal pattern for two consecutive months. This has been attributed mainly to the higher prices of tomatoes, which increased by 17.69%.
Meanwhile, prices of fresh fruits increased 13.91%, registering the third consecutive increase.
The CBE attributed the 44.1% increase on citrus fruit prices, with combined fresh fruit and vegetable prices contributing 0.54 percentage points to monthly headline inflation.
Poultry prices increased by 5.41%, registering the fifth consecutive increase after six consecutive months of decline. Prices for this food commodity contributed 0.23 percentage points to monthly headline inflation.
Prices of red meat also increased by 5%, registering the fourth consecutive increase after four consecutive months of decline, to contribute by 0.19 percentage points to monthly headline inflation.
Fish and seafood prices seasonally increased by 6.1%, registering the second consecutive increase, to contribute by 0.13 percentage points to monthly headline inflation.
Prices of retail items increased by 0.64%, mainly due to higher prices of household cleaning products, as well as the seasonally higher clothing and footwear prices.