The Central Agency for Public Mobilization and Statistics (CAPMAS) announced on Tuesday that the annual urban inflation rate rose to 38% in September 2023, up from 37.4% in August 2023, and 15% in September 2022. According to CAPMAS, the prices of some food items decreased or remained stable, such as grains and bread (-1.3%), meat and poultry (-0.1%), fish and seafood (0%), and water and housing services (0%). However, the prices of other food items increased significantly, such as dairy, cheese and eggs (5.4%), oils and fats (0.4%), fruits (5.4%), vegetables (19.2%), sugar and sweets (2.9%), coffee, tea and cocoa (2.2%), and tobacco (1.6%). The prices of non-food items also increased in various categories, such as fabrics (3.8%), garments (1.7%), shoes (1.4%), shoe repairs (1.0%), housing rents (0.8%), home appliances (1.9%), glassware, tableware and utensils (0.9%), outpatient services (0.8%), hospital services (1.6%), vehicle purchases (0.5%), private transportation expenses (0.2%), transportation services (0.2%), newspapers, books, and stationery (3.5%), ready meals (1.3%), hotel services (0.3%), and personal care (1.4%). The monthly core inflation rate, calculated by the Central Bank of Egypt (CBE), was recorded at 1.1% in September 2023, compared to 1.6% in the same month of the previous year and 0.3% in August 2023. The annual core inflation rate reached 39.7% in September 2023, down from 40.4% in August 2023. The Monetary Policy Committee of the CBE decided, in its meeting on 21 September 2023, to keep the CBE's basic interest rates unchanged at 19.25% for deposits, 20.25% for lending, and 19.75% for the credit and discount rates and the main operation of the CBE. The committee said, in its statement accompanying this decision, that global commodity prices, especially energy prices, continued to rise globally, compared to the expectations that were presented to the committee during its meeting in August 2023, and global inflation rates also increased in the short term to remain above target levels, which poses a challenge to restoring price stability globally, expecting that key yield rates will stay at their high levels. It added that although the annual inflation rate of food commodities continued to rise, it was driven by the increase in the prices of fresh vegetables and fruits, unlike previous months, which were affected by the rise in the prices of basic food commodities, noting that the monthly changes for both July and August 2023 reflected the impact of supply chain disruptions and unfavourable weather conditions that contributed to a higher seasonal increase in agricultural product prices. It confirmed that it will continue to assess the impact of the tight monetary policy that was taken, and its effect on the economy based on the data received during the coming period. The committee also confirmed that the path of basic return rates depends on expected inflation rates and not prevailing inflation rates, pointing out that it will continue to follow economic developments and expectations in the next stage, and will not hesitate to use all available monetary policy tools, to maintain restrictive monetary conditions to achieve inflation rates of 7% (±2%) on average during the fourth quarter of 2024 and 5% (±2%) on average during the fourth quarter of 2006.
