Egypt’s annual inflation rate hit 12.1 percent in March, official figures showed Sunday, as foreign reserves declined by $4 billion during the same month, according to the central bank.
“The annual headline inflation rate recorded 12.1 percent for March 2022, compared to 4.8 percent for the same month last year,” the Central Agency for Public Mobilization and Statistics (CAPMAS) said in a statement.
The latest figure marks an increase of more than two percent compared to the 10 percent inflation rate recorded in February — already at a near three-year high.
This comes less than three weeks after the Egyptian pound depreciated against the dollar, losing about 17 percent of its value in one day.
The Arab world’s most populous country has been struck by mounting economic pressures since Russia’s invasion of Ukraine in late February caused global commodity price to shoot up.
As the world’s largest importer of wheat, Egypt relied on the two countries for 85 percent of its supply, as well as 73 percent of its sunflower oil.
CAPMAS attributed the latest hike to a surge in food prices, specifically an 11 percent increase in bread and grain prices and a 36.2 percent increase in the price of cooking oil.
It comes after the Central Bank of Egypt said on Thursday that foreign reserves saw a $4 billion decline, registering $37 billion at the end of March 2022, compared to $41 billion in February.
It attributed the decline to its mobilization of foreign reserves “to calm the markets” in the wake of the Ukraine war.
Egypt has rolled out a series of measures to mitigate the economic fallout from the conflict, including announcing a $7 billion relief package to shield society’s most vulnerable.
It also announced it was applying for a new loan from the International Monetary Fund.
Regional ally Saudi Arabia last month deposited $5 billion directly in Egypt’s central bank.
A third of Egypt’s 103 million people live in poverty, and nearly the same number are vulnerable to falling into poverty, according to the World Bank.