Why did Egypt’s inflation increase during June 2023?

Why did Egypt’s inflation increase during June 2023?

Egypt’s annual urban inflation increased to 35.7% in June 2023 from 32.7% in May 2023. The acceleration continued to be driven by higher food and non-food prices. Annual food and non-food inflation increased to 65.9% and 20.9% in June 2023, respectively. Following its pick up in May 2023, annual core inflation increased to 41% in June 2023 from 40.3% during the previous month. On a monthly basis, core inflation recorded 1.7% in June 2023, compared to 1.2% in June 2022. Monthly urban inflation recorded 2.1% in June 2023 which remains higher than its usual monthly pattern. Non-Food inflation increased due to a market increase in tobacco prices, in addition to higher retail items and services prices. Retail items’ prices reflected the price increase of clothing, medical products, households’ appliances, household cleaning products and personal cleaning products, among others. The increase in services prices reflected mainly higher prices of restaurants and cafes, haircuts, and outpatient services. Despite its deceleration, monthly food inflation contributed positively to headline inflation mainly driven by higher core food prices (red meat and poultry, among others), besides higher prices of fresh fruits which were mostly offset by lower prices of fresh vegetables. Annual inflation in rural areas