Rising unemployment and inflation are challenging the ability of vulnerable households to meet their basic needs. According to the September 2013 Egyptian Food Observatory report, poor households surveyed in 10 governorates were more vulnerable to shocks and specifically food-price shocks. The share of households reducing the quantity of food consumed increased from 14.5% to 18% and other coping strategies such as borrowing food, or money to buy food, increased from approximately 28% to 35%.
Y/y inflation increased up to 12.5% and food inflation up to 18.1% in December 2013 (rice and wheat flour had surges of 26% and 10%); the cumulative impact of staple food price changes on the cost of the basic food basket from October to December 2013 was high. The rising trend is alerting and may be partially explained by the depreciation of the local currency at the beginning of 2013. In addition, it is compounded by a number of supply-side shocks throughout the year as well as the low base effect due to low inflation rates in 2012.
Price trends have only started to ease m/m in December 2013 (-1.3% general inflation and -1.8% food inflation).