In an unexpected turn of events, Egypt’s annual urban consumer price inflation rate accelerated to 26.2% in August, up from 25.7% in July, according to data from the Central Agency for Public Mobilization and Statistics (CAPMAS). The month-on-month increase was even more stark, with prices jumping by 2.1% compared to a 0.4% rise in July. Food prices, which are a major concern for many households, climbed by 1.8% in August after a brief dip in July and are now a whopping 29% higher than they were a year ago.

So, what does this mean for you and your day-to-day life? Let’s break it down.

Higher Costs Across the Board

Inflation is essentially the rate at which prices rise, meaning you’ll likely be paying more for just about everything. Whether you’re doing your weekly grocery shopping, filling up your car with fuel, or paying your electricity bill, the cost of living is set to increase.

Food prices in particular have skyrocketed, increasing by 29% from last year. That means your grocery budget is likely to take a hit, especially if you’ve already noticed price hikes for essentials like vegetables, meat, and other staples.

Fuel and Metro Price Hikes

One of the key reasons for this inflation spike is the fuel price hike announced at the end of July. Diesel prices, which have a widespread impact on transportation and logistics, went up by 10-15%. This increase not only affects the cost of filling up your car but also drives up the cost of transporting goods, which is passed down to consumers in the form of higher prices for almost everything.

If you use public transportation, you’re also feeling the pinch. Metro tickets jumped by 25-33% at the beginning of August, which means your daily commute just got a lot more expensive.

Higher Utility Bills

To add to the financial strain, electricity tariffs increased by 21-31% in August. This means you can expect higher utility bills, especially if you’re using air conditioning or other energy-intensive appliances during the summer months. With energy costs rising, it’s a good time to reassess your household budget and look for ways to cut down on electricity usage where possible.

Interest Rates: A Mixed Bag

Inflation had been declining since September’s record high of 38%, but with the latest spike, all eyes are on the central bank’s next move. In July, for the first time since January 2022, the central bank’s real overnight borrowing rate turned positive. This means that while inflation is high, the interest rate on loans is higher, which could lead to further hikes in interest rates.

If you have any loans, this could mean higher repayment costs in the future. However, for savers, higher interest rates can be a silver lining, as they may yield better returns on savings accounts.

Why Is This Happening?

Economists like Sara Saada from CI Capital weren’t surprised by the inflation increase, citing the fuel price hikes and seasonal summer produce prices as key contributors.

“We expected this, as the August reading reflects energy price hikes that were announced in the last week of July. This included diesel, that has a broad-based effect,” Saada told Reuters.

Beyond fuel, the cost of transportation and energy has risen, putting pressure on all sectors of the economy and leading to higher prices for goods and services. In short, this inflation isn’t happening in isolation—it’s a ripple effect from rising global energy costs, local fuel hikes, and seasonal price increases.

What Can You Do?

With inflation on the rise, it’s more important than ever to stay mindful of your spending. Here are a few tips to manage the higher costs:

1. Revisit Your Budget: Now is a good time to review your household expenses and see where you can cut back. Focus on essential spending and look for ways to reduce non-essential costs.
2. Shop Smart: With food prices on the rise, consider shopping for seasonal produce, buying in bulk, or looking for discounts and promotions to keep grocery costs down.
3. Monitor Energy Usage: Given the hike in electricity tariffs, try to reduce your energy consumption where possible. Simple changes like turning off lights, using energy-efficient appliances, and minimizing air conditioning use can make a difference.
4. Keep an Eye on Interest Rates: If you have loans, watch for any changes in interest rates. If rates go up, it could be worth paying off loans sooner to avoid higher repayments.

Egypt’s rising inflation is impacting everyone, with higher costs for food, transportation, and utilities making day-to-day life more expensive. While these changes can be challenging, staying informed and adjusting your budget can help you navigate this period of economic uncertainty. Keep an eye on how inflation evolves in the coming months, as the central bank’s decisions on interest rates will likely play a key role in shaping the future financial landscape.

Stay prepared, stay informed, and most importantly, stay adaptable.