Egypt headline inflation plunges to 12.8 pct in February

CAIRO - Egypt's annual urban consumer price inflation plunged to 12.8 pct in February from 24.0 pct in January, decelerating even faster than analysts had expected, data from statistics agency CAPMAS showed on Monday.

Due to the base effect, the exceptionally high price increases of the last two years are no longer being reflected in the statistics, analysts said.

Fifteen analysts polled by Reuters last week had expected inflation to cool to a median 14.5%.

Month on month, prices were 1.4% higher in February than in January.

Food and beverage prices were up by an annual 3.7% after rising 0.2% from January.

Inflation had been climbing since early 2022 following the Russian invasion of Ukraine, which prompted foreign investors to withdraw billions of dollars from Egyptian treasury markets.

Headline inflation reached a record high of 38.0% in September 2023.

The price rises were fuelled in part by rapid growth in the money supply. M2 money supply expanded by an all-time high of 32.1% in the year to end-January, central bank data showed.

Egypt a year ago sharply devalued its currency, raised interest rates by 600 basis points and signed an $8 billion financial support package with the International Monetary Fund, helping to bring its finances under control.