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Egypt’s monthly inflation falls for first time in 2022

The Central Bank of Egypt declined to raise interest rates again last month. Annual inflation is still up from last year.
Workers sort oranges at the MAFA farms pack house on January 31, 2021 in Cairo, Egypt.

Monthly inflation in Egypt finally fell last month, albeit slightly. 

The monthly inflation rate was 13.2% in June, down 0.03% from May. This was the first decrease in the monthly inflation rate in seven months, the state-owned news outlet Al-Ahram reported Thursday. 

Why it matters: Like other countries in the region, Egypt is experiencing a high degree of inflation. The price increases partly result from the Russian invasion of Ukraine, which has disrupted global supply chains worldwide. Egypt has been particularly affected by the war, as it previously imported most of its wheat from Russia and Ukraine. 

The Central Bank of Egypt raised interest rates in March for the first time since 2017, and then raised rates again in May in an effort to contain inflation. 

However, last month, the financial institution notably declined to further raise rates, maintaining that inflation was under control. 

Though monthly inflation is declining, Egypt’s annual inflation rose to 14.7% in June, up from 5.3% from the same month last year, according to Al-Ahram. 

What’s next: The Central Bank’s monetary policy committee will meet again on Aug. 18, when they will decide whether to take further action on interest rates.