Egypt's annual urban consumer inflation rate rose to 32.7% year on year in March, narrowly short of a record high, from 31.9% in February, according to figures from the country's statistics agency CAPMAS released on Monday.
The rising inflation rate results from a series of currency depreciations beginning in March 2022, a protracted lack of foreign currency, and ongoing delays in importing goods into the nation.
Egypt, which received a $3 billion loan from the International Monetary Fund in December, has depreciated its currency by half since March 2022, due to the aftermath of Russia's invasion of Ukraine, which highlighted weaknesses in the Egyptian economy.
Annual urban consumer inflation rose to 33.6% in March, according to the consensus expectation of 13 economists surveyed.
Egypt's highest inflation rate was 32.952% in July 2017, eight months after the country's currency was depreciated by half as part of a previous $12 billion IMF assistance package.
The core inflation figure, which excludes gasoline and some volatile food items, is due later Monday. The median of analyst projections is that it will rise to 42.25% from the present record of 40.26% in February.
Food and commodity prices have been steadily rising for over a year, making it difficult for some Egyptians to cope and forcing Egyptian authorities to increase social and financial support to the most vulnerable members of society in order to avoid a backlash from the country's deteriorating economic situation.
Recently, Egypt also hiked its interest rate. The Central Bank of Egypt hiked interest rates in the hopes of taming Egypt's raging inflation and supporting the Egyptian pound, which has been progressively losing value against international currencies. Yet, the failure of successive rate rises over the last year has fueled doubt among some economists about the latest rate hike's capacity to succeed where previous ones had failed.
"The latest rate increase cannot succeed where previous ones had failed because our government follows an expansionary policy, instead of the contractionary one it should be following," Alia al-Mahdi, former dean of the School of Economics and Political Science at Cairo University, stated.
Egypt is currently one of the five African countries with the worst debt crises in 2023. Inflation, rising borrowing rates, and a strong dollar have made it harder for Egypt and a few other countries to repay loans and generate finances, causing the Nothern African country to endure some economic consequences.