The urban inflation rate in Egypt decreased for the fourth consecutive month in June, falling from 28.1% in May to 27.5%, based on data released by the country’s statistics agency on Wednesday.
The decline in inflation, which began in September 2023, when it peaked at 38%, can be attributed to the government’s strategic implementation of an inflation-targeting model and a flexible exchange rate.
The central bank also reported on the same day that core inflation, which does not include volatile items such as fuel and certain food products, dropped from 27.1% in May to 26.6% year over year.
Economists indicate that efforts to increase local food production in Egypt have been ineffective, leaving the country’s economy vulnerable to external factors.
In June, food and beverage prices increased by 30.8% year-on-year and 3% month-on-month due to a 300% surge in subsidized bread prices starting June 1.
Despite the surge in bread prices, which account for only about 1% of the food basket, the overall index was minimally affected. This was due to the offsetting effect of lower prices for other food items and a positive base effect.