The annual inflation rate in consumer prices in Egypt's cities rose to 19.4 percent in November, compared to 13.6 percent in October, as announced Thursday by the Central Agency for Public Mobilization and Statistics, also known as CAPMAS.
During the second week of September 2016, the government began the application of the value-added tax, which is usually accompanied by an increase in overall tax costs.
The Central Bank of Egypt announced in the first week of November the floatation of the pound, giving flexibility to the banks operating in Egypt to set the prices of purchase and sale of foreign exchange.
Hours later, the government announced lifting the subsidies of fuel, raising the prices of gasoline, diesel fuel, kerosene and LPG (liquid petroleum gas) cylinders to rates ranging between 7.1 and 87.5 percent.
Analysts at investment banks had predicted that the pound flotation decision and the increased price of petroleum products would lead to a big jump in the price of goods and services; especially the price of transportation, food, goods and medicines that depended on the previous official price of the US dollar — which used to be less than LE10.
Egypt has suffered in recent years from economic decline amid a worsening budget deficit, a rising inflation rate, a decline in production due to the shutdown of companies and factories, and the scarcity of hard currency which was mainly generated by the tourism industry, investment and the Suez Canal revenues.