CAIRO, August 10, 2008 (AFP) - Inflation soared to a record 23.1 percent in Egypt in July, fuelled by skyrocketing food prices, the CAPMAS national statistics agency reported on Sunday.

The dramatic rise in the national consumer price index -- the highest jump in 16 years -- was mainly due to an increase of 32.5 percent year-on-year in food prices, CAPMAS said.

Official inflation figures are released every two months, with the previous figure for May put at 21.1 percent and for March at 15.8 percent.

Year-on-year inflation in urban areas was 22 percent for July and 24.3 percent in rural areas.

Urban inflation stood at 19.7 percent in May.

Egypt's inflation seemed under control until the start of the year, but began to surge in March due to the rising cost of foodstuffs on the world market, particularly for wheat, of which Egypt is a major importer.

President Hosni Mubarak in May announced a 30 percent increase in civil servants' salaries, sparking a spiral of price increases in consumer products such as petrol and cigarettes.

In its report on July inflation, CAPMAS listed the most noticeable price increases as being 71.1 percent year-on-year for butter, 38.5 percent for dairy products, 39.1 percent for poultry and 32.8 percent for pasta.

For the fifth time this year, the Egyptian central bank last week raised by half a point its prime rates, to 11 percent for deposits and 13 percent for loans.

While the rates increase is aimed at calming inflation, it could also have a negative effect on economic growth, which had been heading for a strong seven percent this year, economists warn.