Russia-Ukraine conflict pushes Egypt’s inflation to 10% in February

In Egypt, Annual inflation reached 10% in February, the highest since mid-2019, according to the national statistics agency (CAPMAS), as the war in Ukraine pushes up prices worldwide.

In February 2021, this rate was at a peak of 4.9%, according to CAPMAS.

By February 2022, it had exploded to 10% as prices for food and beverages, including vegetables, fruit, bread and cereals, rose by 20.1%, the government agency said.

Already in July 2017, inflation had reached an all-time high of 34.2%, before coming down again. By May 2019, it had fallen back to 11%.

The Russian invasion of Ukraine has pushed food, energy and commodity prices to record levels for the past two weeks.

Brent crude oil rose to $130 a barrel on Mar. 8, as the price of natural gas began to increase across Europe on war-induced disruption of global supply chains.

These two countries account for about a third of global wheat imports, of which Egypt is the world's largest importer.

On Wednesday, Egypt's finance minister Mohamed Maait announced that the state's budget for wheat purchases would "increase by 15 billion Egyptian pounds", or about 865 million euros.

"Before the crisis in Ukraine, we used to buy a tonne of wheat for 226 euros, now it costs 363 euros," he said.

Inflation has not stopped rising in Egypt since the launch in November 2016 of a reform programme under the aegis of the International Monetary Fund (IMF).

This institution granted Cairo a loan of nearly 11 billion euros in exchange for drastic austerity measures, including a sharp devaluation and a review of the system of subsidies on essential goods.