Egypt Watch

Egypt: 1% increase in the average consumer price index

The Central Agency for Public Mobilisation and Statistics (CAPMAS) in Egypt announced that the average consumer price index rose in January by one per cent, recording 119.1 points.

CAPMAS attributed this to a rise in the prices of sugar and sugary foods by 14.7 per cent; vegetables by 4.3 per cent; dairy, cheese and eggs by 2.5 per cent; meat and poultry by 2.3 per cent; bread by two per cent; oils by 0.5 per cent; rent by 0.5 per cent; electricity, gas and other fuels by 0.2 per cent; goods and services used in home maintenance by 0.6 per cent; outpatient services by 1.1 per cent; hospital services by 0.5 per cent; medical products, devices and equipment by 0.1 per cent; and ready meals by 0.8 per cent.

The annual inflation rate also continued to rise, recording eight per cent in January, compared to 4.8 per cent for the same month in the previous year. The high rates of inflation in general, and the high prices of food commodities in particular, are due to disruptions in the global economy in supply chains, according to reports.

According to Heba El-Leithi, a professor of statistics at the Faculty of Economics and Political Science at Cairo University, and an advisor to the head of CAPMAS, this impact of the rise in food prices globally means that any rationing of food subsidies should include an increase in the value of these subsidies for those who prove their eligibility to continue receiving them, in order to protect them from being overly affected by the rise in food prices.

Last December, President Abdel Fattah Al-Sisi said that ration cards will not be issued in the future to those who get married, and if they are issued, they will include only two individuals, which means that millions of Egyptians will no longer be eligible.

Sisi considered that spending on subsidies is the reason for the state’s delay in development, justifying that the state needs funds in order to launch new projects.

The allocations for subsidising food commodities in the Egyptian budget for the current fiscal year fell to EGP 87.2 million. The same has happened to petroleum products, health insurance, medicines, passenger transport, support for farmers, and more so with electricity.