Annual headline urban inflation increased to record 10.5% in March 2022 from 8.8% in February 2022, marking the highest rate since June 2019, according to the Central Bank of Egypt. The increase in annual headline inflation is attributed to strong monthly core food and services dynamics in March 2022.
This comes as monthly headline urban inflation recorded 2.2% in March 2022 compared to 0.6% in March 2021. Monthly headline urban inflation in March 2022 was strongly driven by higher prices of core food items across the board, reflecting the impact of the Russo-Ukrainian war on the prices of wheat and wheat derivatives, as well as the seasonal impact of Ramadan on the rest of the core food products.
Monthly inflation was also strongly driven by higher prices of services, reflecting the return of pilgrimage trips to Saudi Arabia as the Saudi authorities ease their COVID-19 restrictions, and further supported by higher expenditures on restaurants and cafes, which in turn were indirectly impacted by higher prices of food items. Additionally, monthly headline inflation was affected by an increase in the contribution of regulated items, reflecting higher prices of tobacco products.
Meanwhile, the prices of volatile food items declined on a monthly basis, while retail items contributed marginally to monthly headline inflation.
On an annual basis, the increase in headline inflation during March 2022 was driven by the higher annual contribution of non-food items, as annual non-food inflation increased for the fifth consecutive month to record 6.5% in March 2022 compared to 5.2% in February 2022, which is the highest rate recorded since February 2021.—Zawya News
