Egypt's annual headline inflation climbed to an all-time high of 35.7% in June, official data showed on Monday, accelerating past the previous high reached in 2017 and reflecting acute economic strains since early last year.
The year-over-year reading is up from 32.7% in May, as the country grapples with a punishing economic crisis.
Prices soared as Egypt has struggled through a shortage of foreign currency and repeated devaluations since March 2022, increasing hardships for many Egyptians who have seen their living standards eroded in recent years.
"All we hear about is inflation," said Wafaa Youssry, a 40-year-old Uber driver from Cairo, who said she no longer had enough money to send her children to private schools despite her husband moving to Kuwait for better pay.
"It's forced me to think creatively because there aren't enough jobs here that pay decent salaries."
Analysts had forecast the record reading for annual urban consumer price inflation in June, citing an unfavorable base effect and an increase in consumer demand over the annual Qurban Bayram, also known as Eid al-Adha, holiday.
The continuing surge in inflation may increase pressure on Egypt's central bank to raise interest rates at its next scheduled meeting on Aug. 3. The bank has held rates steady in its last two meetings, after raising them by a total of 1,000 basis points since March 2022.
Increases in electricity tariffs, which the government has deferred in an effort to soften the impact of inflation, could reinforce price pressures through the summer.
"Assuming we see power tariffs being hiked in July, annual inflation could remain high for a longer duration," said Allen Sandeep of Naeem Brokerage.
"Without the power tariff hike, we might see some cooling off in July because of the favorable base year."
Egypt, the Arab world's most populous nation, has devalued its currency by about half since March 2022 after the fallout from Russia's invasion of Ukraine exposed its economic vulnerabilities and prompted it to seek assistance from the International Monetary Fund (IMF) under a $3 billion loan deal.
The first review of the IMF program has been delayed amid uncertainty over Egypt's pledge to move to a flexible exchange rate.
The previous headline inflation record of 32.95% was reached in July 2017, eight months after Egypt devalued its currency by half as part of a previous IMF package.
Even before the war in Ukraine, which destabilized crucial food imports, 30% of Egyptians were living below the poverty line, according to the World Bank.
After the invasion unsettled global markets, investors pulled billions out of Cairo's foreign reserves, which have shown a slight increase this year. Reserves stood at $34.8 billion in March, up $500 million since February but still $7 billion less than before the war.
Around $28 billion of those reserves are deposits from wealthy Gulf allies, whose promises to purchase Egyptian state assets have stalled in recent months.
Egypt is one of the five economies most at risk of defaulting on its foreign debt, according to rating agency Moody's.
The country's external debt bill has tripled over the past decade, rising to a record high of $165.4 billion this year, according to Ministry of Planning figures.