Egypt’s inflation records 5.1% in 2020, declines to 6% in December

CAIRO – 10 January 2021: Egypt’s annual consumer price inflation recorded 5.1 percent in 2020, compared to 8.5 percent in  2019, state-statistics body said Sunday. 

In December 2020, inflation hit 6 percent, compared to 6.8 percent in the same month of prior year.

On a monthly basis, inflation recorded 110.6 points in December 2020, marking a decrease of 0.5 percent compared to November 2020, the Central Agency for Public Mobilization and Statistics (CAPMAS) said. 

CAPMAS attributed the dip in inflation to the decrease in prices of some commodities during the month, as the  vegetables group by 10.1 percent, the fish and seafood group by 0.6 percent, the meat and pourtly group by 0.2 percent, the milk, cheese and eggs by 0.1 percent, and the ready-made clothes by 0.6 percent

The agency pointed out that this came despite the increase in the prices of the fruit group by 3.8 percent, the oils and fats group by 0.5 percent, grains and bread by 0.2 percent, transportation services by 0.7 percent, and the calculated rent for housing by 0.1 percent.

At the urban level, the annual inflation rate for December 2020 declined to 5.4 percent, up from 5.7 percent in November. 

The sustainable development plan for 2020/2021 expected the inflation rate to increase to 9.8 percent if coronavirus crisis continued until December 2020. 

Inflation remains within the Central Bank of Egypt’s (CBE) target range of 9 percent, plus or minus 3 percentage points, despite the precautionary measures taken aiming to curb the spread of coronavirus that are expected to raise the rate of inflation.

The Monetary Policy Committee of the Central Bank of Egypt (CBE) decided Thursday, Dec. 24, to keep the overnight deposit rate, overnight lending rate, and the rate of the main operation unchanged at 8.25 percent, 9.25 percent, and 8.75 percent, respectively. Moreover, the discount rate was also kept at 8.75 percent.

Egypt's 2020/2021 draft budget aims to reduce public debt of GDP to 82.7 percent by end of June 2021, up from earlier target of 82.5 percent by the end of June 2020 and to 77.5 percent by the end of June 2022.