Inflation

Prices of petrol, bread, rice and oil have been rising far faster than wages for many years.

The Egyptian citizenry is young, hungry, and unemployed, and has been suffocating for more than a decade from rising inflation—from 4.3% in 2003 to 12% in 2010. People experience this as constantly rising prices for food, clothing, and other necessities. The masses of poor and middle class Egyptians have long felt that their government has done nothing to protect them from slowly sinking into ever greater economic woes in the face of ever-rising prices in the things that matter most–bread, oil, rice–and stagnant wages for most of  those lucky enough to have jobs at all.

Inflation spiked in the late 1980s at almost 30%, and President Mubarak took pride in having brought inflation down to below 5 percent. But in the last decade inflation has tripled. Those are the official figures; most Egyptians believe inflation is worse–perhaps even double–and some international economists agree with them.

Already caught in this inflationary vise, Egypt has been very vulnerable to the global high inflation that has accompanied the last two years of global recession. When inflation rises faster than economic growth, and there is high unemployment, it leads to a condition some economists call “stagflation” — a dire condition in which policies designed to compat inflation, stimulate growth or create jobs may actually add to economic woes.

Inflation Rates

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