Egypt experienced an all-time high in annual inflation, reaching 39.7% in August according to official figures released on Sunday.
Gatekeepers News reports that this alarming rate follows the previous record of 38.2% in July and marks over a year of enduring economic turmoil, during which the country’s currency lost half its value against the US dollar since early last year.
According to the state statistics agency CAPMAS on Sunday, the surge in prices is particularly pronounced in the food and drink sector, which saw a staggering 71.9% increase compared to August 2022. These rising costs are adding to the financial burden faced by families struggling to make ends meet.
The economic crisis in Egypt worsened due to Russia’s invasion of Ukraine last year, which disrupted crucial food supplies and global markets.
Investors withdrew significant sums from Cairo’s foreign reserves, which had been supported by deposits from wealthy Gulf allies. These deposits, however, failed to meet the government’s targets for purchasing Egyptian state assets
Even before this crisis, 30% of Egyptians were living below the poverty line, and another 30% were vulnerable to falling into poverty, according to the World Bank.
Egypt, the most populous country in the Arab world, has relied on bailouts from Gulf allies and the International Monetary Fund in recent years.
Last year, the IMF approved a $3 billion loan for Egypt conditioned on “a permanent shift to a flexible exchange rate regime”.
According to figures from the Ministry of Planning.Egypt’s external debt has tripled over the past decade, reaching a record high of $165.4 billion this year