Central Bank of Egypt justifies high inflation in July 2022
July's inflation was mainly impacted by increase of core food, retail, and service prices
Hossam Mounir August 17, 2022 Comments Off

gypt’s annual headline urban inflation resumed its upward trend to record 13.6% in July 2022, after decelerating in June 2022 to 13.2%.
The inflation increase was mainly impacted by the price hike of core food, retail products, and services, mainly due to the celebrations of Eid Al-Adha, the repercussions of Ukraine-Russia conflict, and indirect effects of higher prices of fuel products. Meanwhile, prices of fresh vegetables continued to decrease due to the increase in supply of many agricultural products.
Moreover, the monthly headline urban inflation recorded 1.3% in July 2022 compared to 0.9% in July 2021. The monthly inflation hike in July 2022 reflected higher prices of regulated items which is related to the higher fuel prices announced by the automatic price indexation committee on 13 July 2022, marking the third price increase in the year.
On an annual basis, headline inflation during July 2022 was driven by the higher annual non-food inflation for the ninth consecutive month, to record 9.9% in July 2022 compared to 9.1% in June 2022. Meanwhile, annual food inflation remained broadly stable at 22.4% in July 2022, compared to 22.3% in June 2022, and 24.8% in May 2022.
Driven by broad based higher annual contributions, annual core inflation increased for the eleventh consecutive month, to record 15.6% in July 2022 from 14.6% in June 2022, the highest rate since December 2017. This comes as monthly core inflation recorded 1.5% in July 2022 compared to 0.6 in July 2021.
Nationwide annual inflation and annual rural inflation declined to record 14.6% and 15.6% in July 2022, from 14.7% and 16.2% in June 2022, respectively.
Prices of regulated items increased by 2.1%, contributing 0.50% to the monthly headline inflation. This was mainly due to higher prices of fuel products, inland transportation, and tobacco products. Prices of fresh fruits increased 5.2%, while prices of fresh vegetables declined by 12.5%. Together, they contributed -0.28% to the monthly headline inflation. Prices of eggs increased by 13.0%, to contribute 0.16% to the monthly headline inflation, marking its highest monthly inflation since June 2017. Prices of red meat increased by 2.1%, to contribute 0.09% to the monthly headline inflation. The increase in the prices of red meat was due to Eid El-Adha. Prices of oils and fats increased by 1.9%, to contribute 0.06% to the monthly headline inflation. Prices of dairy products increased by 1.3%, to contribute 0.05% to the monthly headline inflation. Prices of poultry declined by 0.7%, to contribute -0.03% to monthly headline inflation. Prices of other core food items including pasta, rice, tea, among others, also increased, to contribute 0.10% to the monthly headline inflation.
Prices of services increased by 1.0%, to contribute 0.35% to the monthly headline inflation. This was mainly due to the increase in the prices of inland transportation, expenditure on cafes and restaurants, and outpatient services.
Prices of retail items increased by 2.3%, to contribute 0.31% to the monthly headline inflation. This was mainly due to the increase in the prices of motor oils, household cleaning products, clothing and medical products.
Monthly core inflation was affected by price changes of the aforementioned core CPI items. Core food items contributed 0.60% to the monthly core inflation. Services contributed 0.48% to the monthly core inflation. In addition, retail items contributed 0.43% to the monthly core inflation.
Topics: inflation
Hossam Mounir
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