EGYPT – The Central Agency for Public Mobilization and Statistics (CAPMAS) has reported that Egyptian fruits saw a 4% surge with vegetables witnessing a 5.3% increase in prices as Egypt’s annual inflation decelerated to 35.2 percent in December, down from 36.4 percent in November.
Despite this significant ease in inflation, December’s inflation rate remains significantly higher than the 21.9% recorded in December 2022.
This latest inflation reading surpasses the target set by the Central Bank of Egypt (CBE), which aims to keep inflation within seven percent (±2 percent) by the end of 2024.
This marks the third consecutive month of declining inflation rates following a period of steadily increasing rates throughout 2023. The inflation rate peaked in September at 40.3% before beginning its downward trend in October.
Despite the decline in inflation, experts pointed out that prices continue to rise due to various factors, including the pricing of goods and services based on the USD exchange rate in the black market rather than the official exchange rate in banks, which has led to inflated prices.
To address these challenges, Egypt is intensifying its efforts to control prices and reduce inflation. The country has recently launched a price reduction initiative and directed regulatory authorities to tighten control over the market.
Last week, Prime Minister Mostafa Madbouly highlighted the country’s target of reducing inflation to below 10 percent by 2025.
In 2024, Egypt’s average inflation is expected to decrease to 27.4 percent from 34.1 percent in 2023, according to a report by BMI Research, a subsidiary of Fitch Solutions.
On Tuesday, the World Bank (WB) shed light on the external factors influencing Egypt’s inflation problem, highlighting the negative impacts of the conflict in the Middle East, which will exacerbate inflation in the country in 2024.
The ripple effects are felt through “eroding households’ purchasing power, constraining activity in the private sector, and intensify pressures on external accounts through implications on tourism, remittances, and oil trade balance,” the WB added.
Egypt’s fruit and vegetable sector is one of the country’s fastest-growing agribusiness sectors, generating USD 2.2 billion in export earnings for 2020. The sector has taken on a renewed importance domestically, while experiencing an increase in demand for exports
In 2021, Egypt earned more than USD 700 million in export revenue from the agricultural sector, with fresh grapes, frozen strawberries, and fresh marketable potatoes contributing about USD 200 million. Other significant export earners include onions, frozen vegetables, fresh strawberries, and mandarins.
The government is working to boost production through research-based policy reforms and technologies to move closer towards food security.
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