Egypt inflation hits nearly 40% in August year-on-year

Inflation reached 39

Egypt inflation hits nearly 40% in August year-on-year

Inflation reached 39.7% in Egypt in August over one year, its highest historical level in this country whose economic crisis continues to worsen, as the reforms demanded by its creditors are so slow to come.

The figures from the national statistics institute of the most populous Arab country are clear in a country where 60% of inhabitants live below or just above the poverty line. In one year, food prices jumped by 71.9%, transport prices by 15.2% and clothing prices by 23.6%.

For months now, inflation has been rising in Egypt, exacerbated by a currency devaluation of almost 50%. The soaring dollar against the currency directly affects households, since the vast majority of goods are imported in dollars in Egypt. The country of 105 million inhabitants, the world's largest importer of wheat, is bearing the brunt of the war between Ukraine and Russia, its two main suppliers.

External debt has more than tripled in ten years

Between President Abdel Fattah Al-Sissi's megaprojects, subsidies on numerous products and monetary policy to support the Egyptian pound, its external debt has also exploded. It has more than tripled in ten years, reaching a record $165.4 billion this year, according to the planning ministry, making Egypt one of the five countries in the world most exposed to the risk of default. .

Last year, the International Monetary Fund (IMF) approved a three billion dollar loan to help it. But only the first tranche has so far been paid, the next one having been suspended since March, because Cairo has not implemented the reforms demanded by the IMF.