Why Egypt’s inflation declined in April 2023? CBE explains

The annual headline urban inflation decelerated to 30.6% in April 2023 from 32.7% in March 2023, marking the first decline since June 2022. Given a strong monthly rate in April 2022 relative to the typical pattern, the deceleration in April’s annual headline inflation in 2023 is basically attributed to favourable base effects. 

Annual food inflation dropped from 62.9% in March 2023 to 54.7% in April 2023 while annual non-food inflation remained largely stable.

Favourable base effects also had an impact on annual core inflation which decelerated for the second consecutive month to record 38.6% in April 2023 from 39.5% in March 2023. Monthly core inflation recorded 1.7% in April 2023, compared to 2.4% in April 2022 and 2.5% in March 2023.

Monthly headline urban inflation continued to decelerate in April 2023 to record 1.7% down from 2.7% in March 2023, and was equally driven by food and non-food items. 

Despite a monthly deceleration in food inflation, food prices increased, reflecting higher prices of core and volatile food items (mainly red meat, fish, and fresh vegetables) in line with their seasonal pattern. Additionally, the prices of regulated items increased to reflect a hike in tobacco prices announced by Eastern Company on 26 March 2023.