Egypt inflation dips to two-year low of 24.1 per cent in December

Egypt’s annual urban consumer price inflation rate fell to 24.1 per cent year-on-year in December, as expected, from 25.5 per cent in November, its lowest in two years, data from statistics agency CAPMAS showed on Thursday.

Inflation began surging in 2022 following the Russian invasion of Ukraine, which prompted foreign investors to withdraw billions of dollars from Egyptian treasury markets. It reached a record high of 38.0 per cent in September 2023 and was last this low in December 2022, at 21.27 per cent.

The decline in December was broadly in line with expectations, with a median of 13 analysts in a Reuters poll having forecast it falling to 24.2 per cent.

On a monthly basis, urban prices rose by 0.2 per cent compared to 0.5 per cent in November, CAPMAS data showed.

Food prices dropped by 1.5 per cent in December after a 2.8 per cent drop in November, putting them 20.3 per cent higher than they were a year earlier.

Inflation has been fuelled largely by an expansion of money supply.

Egypt’s M2 money supply grew by 29 per cent year-on-year in November, central bank data showed.

Egypt signed an $8 billion financial support package with the International Monetary Fund in March designed to help it narrow its budget deficit and adopt a less inflationary monetary policy.

Egypt’s Prime Minister Mostafa Madbouly said that the country has paid $38.7 billion of its debts during 2024.

Speaking during the weekly cabinet, Madbouly added that $7 billion were paid off in November and December.

Meanwhile Egypt’s food industry achieved remarkable growth from January to November 2024, with exports reaching approximately $5.5 billion.

This represents a 17 per cent increase compared to the $4.7 billion recorded during the same period in 2023, amounting to an additional $813 million.

Notably, this marks the highest export value and growth rate ever recorded during this timeframe, exceeding the total exports for all of 2023, which stood at $5.068 billion, with an increase of $474 million.

The Export Council for Food Industries said in a statement that Arab countries remained Egypt’s largest export market, accounting for $2.936 billion or 53 per cent of total food exports, and achieving a 15 per cent growth in value.

The European Union followed with $1.083 billion, representing 20 per cent of total exports and an impressive 33 per cent growth rate.

Non-Arab African countries contributed $464 million, making up 8 per cent of total exports and growing by 7 per cent.

The United States recorded $302 million in exports, representing 5 per cent of the total and achieving a 40 per cent growth rate.

Other international markets added $756 million, accounting for 14 per cent of total exports, with an 8 per cent growth rate.

The European Union followed with $1.083 billion, representing 20 per cent of total exports and an impressive 33 per cent growth rate.

Non-Arab African countries contributed $464 million, making up 8 per cent of total exports and growing by 7 per cent.

Egypt’s food industry achieved remarkable growth from January to November 2024, with exports reaching approximately $5.5 billion.

This represents a 17 per cent increase compared to the $4.7 billion recorded during the same period in 2023, amounting to an additional $813 million.

Over the decade from 2014 to November 2024, Egypt’s food industry exports accumulated to an impressive $40.5 billion, underscoring the sector’s growing importance in global markets and its role in driving economic growth.

Egyptian Minister of Agriculture and Land Reclamation Alaa Farouk announced that total agricultural exports during the first half of 2024 reached 4.9 million tonnes with a cash value of $2.9 billion, registering an increase of $600 million compared to the same period last year.

The Egyptian Minister of Agriculture said in a statement that there is continuous support for the export system to achieve the presidential goal of reaching $100 billion in Egyptian exports from all sectors by 2030, pointing out that the agricultural sector is an important pillar of Egypt’s national income.

Meanwhile Sherif Fathy, Egyptian Minister of Tourism and Antiquities, announced that Egypt achieved a record in inbound tourism during 2024, welcoming 15.7 million tourists from various markets despite the geopolitical challenges in the region.

In a statement issued by the Ministry of Tourism following his participation in a meeting of the Senate Committee on Culture, Tourism, Antiquities, and Media, Fathy highlighted that the achievements in Egypt’s tourism sector, despite regional and global challenges, were the result of collective efforts that must be sustained.