Conference Paper
Distributional Impacts of the Russia–Ukraine Crisis: The Case of Egypt
No.
ERF29AC_135
Publisher
ERF
Date
April, 2023
In February 2022, global supply chains were disrupted amid the eruption of the Ukraine–Russia war. A jump in prices followed, particularly for basic commodities including food and energy. Using commodity-level data for January–August 2022 from the Central Bank of Egypt, separately for Urban and Rural Egypt, and the 2017 Household Income, Expenditure and Consumption Survey, we investigate the pass-through of commodity prices – through households’ consumption and substitution patterns – to households’ cost of living and welfare. Our results show the distributed lag effects of commodity inflation on households’ consumption patterns, and identify socio-economic groups that are affected most adversely by the shock. We find that those at the lower end of the expenditure distribution as well as those residing in rural areas have experienced systematically higher welfare changes. Between January and May of 2022, when international prices were rising the fastest, the bottom decile of rural households saw an increase in their cost of living of 11.9% while that of the top decile rose by 9.9%. In urban areas the bottom decile’s cost of living rose by 9.9% while that of the top decile rose by 7.4%.
Research Fellows
Shireen AlAzzawi
Lecturer, Economics Department, Leavey School of Business,...
Authors
Vladimir Hlasny
Economic Affairs Officer, UN Economic and Social...