Daily Times

CAIRO: Egypt on Tuesday reported a dramatic jump in the country’s annual urban consumer price inflation, a stark reflection of the heavy toll inflicted by the government’s tough economic measures. The state-run statistics agency said inflation reached a record high of 24.3 percent, the highest since 2008. The statement by the Central Agency for Public Mobilization and Statistics said that food and beverage prices increased in one month by about 5.2 percent and health care costs jumped by nearly 5.6 percent from November. Compared to last year, food prices rose 29.3 percent, cigarette prices jumped 25.6 percent and hotel rates increased nearly 28.3 percent, the agency said. Egypt floated the pound in November to secure a $12 billion loan from the International Monetary Fund. The pound lost about half its value, plunging to around 18 to the dollar, a huge setback in a country heavily dependent on imports ranging from food items to raw materials. Despite assurances by the Egyptian president that the pound will gain strength in the months that followed flotation, its value remained weak. On Tuesday, the Egyptian pound traded at 18.2 to the dollar, more than double the value before November measures when the pound traded at 8.0 to the dollar. The economic measures were hailed by the IMF and foreign reserves jumped to $23 billion in November, up from $19 billion the month before. However, with half of the country’s 92 million population under the poverty line and salaries remaining largely the same, the price hikes had a heavy impact on millions of Egyptians. Egypt’s President Abdel-Fattah el-Sissi pleaded to Egyptians to bear the austerity measures, saying the reforms are needed to heal the budget’s deficit and gain the confidence of international investors in the Egyptian economy. Since coming to power, el-Sissi has relied on billions of dollars of assistance from Gulf Arab countries such as Saudi Arabia. However, relations with the Sunni kingdom have become strained recently over several regional crises, including the conflict in Syria.