2023-09-11 12:24:22
Inflation reached 39.7% in Egypt in August, the highest level in history. This country, the world’s largest importer of wheat, is suffering the full brunt of the war in Ukraine.
Inflation reached 39.7% in Egypt in August, according to official figures released on Sunday, the highest historical level in this country which is going through the worst economic crisis in its history. The national statistics institute reports in particular an annual increase of 71.9% in food prices, 15.2% for transport and 23.6% for clothing.
In recent months, Egypt has experienced a rise in inflation and a devaluation of almost 50%, on the one hand because, as the world’s largest importer of wheat, it is suffering from the war in Ukraine, and on the other hand because its debt exploded. 85% of its wheat imports come from Russia and Ukraine. Of the 12.5 million tonnes purchased, 8.1 million come from Moscow and 2.5 million from kyiv.
In recent months, Egypt has experienced a rise in inflation and a devaluation of almost 50%.
Production too low
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. According to le Middle East Institute de WashingtonEgyptians consume 150 to 180 kilograms of bread per capita each year, double the world average.
The price of round bread, called aish baladi, has become one of the main issues for the country and in particular for President Abdel Fattah al-Sissi, in power since 2014. Wheat production in the country is far too low to feed the population. Once the breadbasket of Antiquity, Egypt produces 9 million tonnes per year for consumption estimated at 21 million tonnes.
Egypt is now one of the five countries in the world most exposed to the risk of defaulting on its external debt, according to the Moody’s agency. Last year, the International Monetary Fund approved a $3 billion loan for Egypt, whose foreign debt has more than tripled in a decade, reaching a record $165.4 billion this year, according to figures from the Ministry of Planning.
After having counted for years on bailouts from Gulf countries in the form of deposits at the Central Bank, Cairo is now struggling to sell assets or open projects on its soil to Gulf investors who now say they want “returns on investment”.
At the end of August, the five countries of BRICS (Brazil, Russia, India, China, South Africa) announced the expansion of their group by integrating six new states, including Egypt. This membership will take effect from January 1, 2024.
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