Egypt’s annual urban consumer inflation in April slowed to 30.6% from 32.7% in March, data from the state statistics agency CAPMAS showed on Wednesday, lower than analysts had expected. Month-on-month, urban inflation slowed to 1.7% from 2.7% in March and 6.5% in February.
Inflation had steadily crept up over the last year after a series of currency devaluations starting in March 2022, a prolonged shortage of foreign currency and continuing delays in getting imports into the country.
The median forecast of 13 analysts polled had suggested annual urban consumer inflation would slip to 31.0% in April. Annual core inflation eased to 38.6% from 39.5% in March, data from the central bank showed on Wednesday.
The softening in inflation was likely to be brief, EFG Hermes said in note, after the government hiked diesel prices in early May by about 14% and raised the price of subsidised food staples by various amounts for ration card holders, in addition to a further weakening of the currency on the black market.
Egypt has devalued its currency by half since March 2022 after fallout from Russia’s invasion of Ukraine exposed its economic vulnerabilities. The government secured a $3 billion financial support package from the International Monetary Fund (IMF) in December.