Friday October 16 2015
Egyptian Inflation Rate Jumps to 9.2% in September
Central Bank of Egypt | Joana Ferreira | joana.ferreira@tradingeconomics.com

Urban consumer prices in Egypt increased by 9.21 percent year-on-year in September of 2015, speeding up from a 2-year low of 7.88 percent reported in the previous month, due to a seasonal hike in vegetable prices.

Year-on-year, cost of fruits and vegetables rose by 29.37 percent, following a 15.41 percent growth in the previous month. Thus, food inflation quickened to 11 percent from 8.23 percent in August. Additional upward pressure came from: housing and utilities (+6.40 percent); medical care (+4.17 percent); transportation (+1.65 percent); clothing and footwear (+8.35 percent); education (+24.68 percent); and hotels, cafes and restaurants (+8.95 percent). By contrast, prices of communications fell 0.07 percent.

Annual core inflation rate was almost unchanged at 5.55 percent in September compared to 5.61 percent in August while it inched up 0.79 percent month-on-month following a 0.23 percent decline in the previous month.

On a monthly basis, consumer prices rose 2.47 percent, compared to a much slower 0.63 percent growth in the previous month, due to higher cost of food and beverages (+4.64 percent from +0.83 percent in August) of which fruits and vegetable were the main upward contributor (+16.24 percent from +6.77 percent) 

Prices rose sharply after the government cut energy subsidies in July of 2014, yet the growth slowed in the last three months as the impact of fiscal consolidation measures weakened. Meanwhile, the Central Bank of Egypt kept interest rates steady at 8.75 percent during the meeting held on September 17th after an unexpected cut in January, as policymakers voiced concern about the balance of risks surrounding the inflation and GDP outlooks.




Thursday September 10 2015
Egypt Inflation Rate Lowest In More Than 2 Years
Yekaterina | yekaterina@tradingeconomics.com

Urban consumer prices in Egypt increased 7.9 percent year-on-year in August of 2015, down from 8.4 percent in the previous month. It is the lowest level since March of 2013 as impact of fiscal consolidation measures implemented last year continues to weaken.

In July 2014, the government slashed energy subsidies and implemented a sales tax on alcohol and cigarettes that drove prices up. As the impact of those measures wanes, the government plans to implement the value-added tax this fiscal year, a move that could again push inflation up.

Year-on-year, food cost increased by 8.2 percent, compared to a 8.3 percent growth in the previous month.The regulated items inflation eased to 12 percent, after 12.5 percent growth in July.

Annual core inflation rate was recorded at 5.6 percent in August, the lowest since January of 2013, compared to 6.5 percent in the previous month.

On a monthly basis, consumer prices rose 0.6 percent. The cost of food and vegetables increased by 6.77 percent and regulated items' by 0.15 percent. 


Thursday August 13 2015
Egypt Inflation Rate Falls to 13-Month Low in July
Central Bank of Egypt | joana.ferreira@tradingeconomics.com

Urban consumer prices in Egypt increased 8.4 percent year-on-year in July of 2015, down from 11.4 percent in the previous month. It is the lowest level since June of 2014 as impact of fiscal consolidation measures implemented last year continue to weaken.

In July 2014, the government slashed energy subsidies and implemented a sales tax on alcohol and cigarettes that drove up prices up. As the impact of those measures wanes, the government plans to implement the value-added tax this fiscal year, a move that could again push inflation up.

Year-on-year, food cost increased by 8.3 percent, compared to a 10.9 percent growth in the previous month, as prices of fruits and vegetables rose at a slower 13.9 percent (+21.3 percent in June). Also, regulated items' inflation eased to 12.5 pecent, after being steady at 19.2 percent in the last two months. Additional upward pressure came from: Housing and utilities (+6.3 percent); transportation (+1.6 percent); clothing and footwear (+7.7 percent); education (+24.7 percent); and hotels, cafes and restaurants (+14.6 percent). In contrast, prices of communications fell 0.2 percent.

Annual core inflation rate was recorded at 6.5 percent in July, the lowest since January of 2013, compared to 8.1 percent in the previous month.

On a monthly basis, consumer prices rose 0.7 percent. The increase was mainly due to higher prices of electricity (+21.2 percent), water (+14.3 percent) and railway transportation (+10.7 percent), as a new fiscal consolidation program was launched by the government in July of 2015. In contrast, cost of fresh fruits declined by 1.76 percent.

Meanwhile, the Central Bank of Egypt kept interest rates steady at 8.75 percent during the meeting held on July 30th after an unexpected cut in January, as policymakers showed concern about inflation and GDP outlook.


Friday June 12 2015
Egypt Inflation Rate at 6-Year High
Joana Taborda | joana.taborda@tradingeconomics.com

Consumer prices in Egypt increased 13.1 percent year-on-year in May of 2015. It is the highest rate since February of 2009.

Consumer prices rose sharply after the government cut energy subsidies in July of 2014, leading cost of gasoline, diesel and natural gas to rise as much as 78 percent.

In May, prices of food and beverages rose 14.75 percent year-on-year and housing and utilities went up 6.06 percent. Additional upward pressure came from cost of medical care (up 2 percent) and transportation (up 21.8 percent). In contrast, communication cost fell 0.18 percent. 

Annual core inflation rate accelerated to 8.14 percent in May, the highest since October last year when it reached 8.47 percent.

The finance minister recently said it expects inflation rate to ease to single digit in the next two or three years.


Friday May 15 2015
Egypt Inflation Rate Slows in April
Central Bank of Egypt | Joana Ferreira | joana.ferreira@tradingeconomics.com

Annual inflation rate in Egypt eased to 10.96 percent in April of 2015 from 11.51 percent in March, as cost of housing and utilities rose at a slower pace.

Compared to April 2014, food and beverages prices increased 9.81 percent, the strongest growth in six months. Housing, water, electricity, gas and other fuels prices went up by 7.57 percent, down from a 13.35 percent growth in the previous month. Additional upward pressure came from: Medical care (+2.00 percent); transportation (+21.54 percent); clothing and footwear (+8.12 percent); education (+24.68 percent); and hotels, cafes and restaurants (+16.66 percent). In contrast, communications fell 0.18 percent.

Annual core inflation edged down to 7.19 percent from 7.21 percent last month.

On a monthly basis, consumer prices rose at a slower 0.11 percent, compared to a 1.55 percent rise in March as cost of housing, water, electricity, gas and other fuels prices fell 5.06 percent. On the other hand, prices of food and non-alcoholic beverages went up by 1.33 percent and cost of clothing and footwear rose 3.46 percent. 



Friday April 24 2015
Egypt Leaves Rates on Hold
Central Bank of Egypt | Joana Ferreira | joana.ferreira@tradingeconomics.com

The Central Bank of Egypt kept its benchmark overnight deposit rate unchanged at 8.75 percent on April 23rd.

The overnight lending rate and the rate of the CBE's main operation were also kept on hold at 9.75 percent and 9.25 percent, respectively. The discount rate remained at 9.25 percent.

Key interest rate was unexpectedly lowered in January, amid inflationary pressure after the government cut subsidies last year. The inflation rate has been on an upward trend since then, reaching 11.5 percent in March, the highest in five months.

Excerpts from the press release by the Central Bank of Egypt:

Headline CPI increased by 1.55 percent (m/m) in March compared to an increase of 1.86 percent in February, while the annual rate increased to 11.51 percent in March from 10.56 percent in February. The bulk of the monthly developments was driven by the upward adjustments in administered prices, particularly tobacco, in addition to supply bottlenecks related to the distribution of butane cylinders. This was coupled with increases in the prices of volatile food items. On the other hand, core CPI increased by 0.76 percent in March compared to 1.10 percent in February, while the annual rate inched up to 7.21 percent in March after registering 7.15 percent in February. Consequently, upward adjustments in administered prices and increases in the prices of volatile food items have recently widened the divergence between the headline and core inflation rates. Upside risks on the inflation outlook from domestic supply shocks are largely mitigated by contained imported inflation, against the background of lower oil prices and the consequent revision in international food price forecasts.

Meanwhile, real GDP grew by 4.3 percent (y/y) in 2014/15 Q2 to record 5.6 percent (y/y) in the first half of the fiscal year, supported by the record growth witnessed in the first quarter. This comes after the 2013/14 fiscal year real GDP growth recorded 2.2 percent (y/y). The expansion in economic activity during 2014/2015 Q2 came on the back of the continued growth in the manufacturing sector and the expansion of tourism activities for the second consecutive quarter after several quarters of contraction. This came despite the continuous weakness in the extraction sector. In the meantime, while the widening trade deficit is stalling real GDP growth, investment remained positive for the fourth consecutive quarter. Looking ahead, while investments in domestic mega projects such as the Suez Canal are expected to contribute to economic growth, the downside risks that surround the global recovery on the back of challenges facing the Euro Area and the softening growth in emerging markets could pose downside risks to domestic GDP.

At this juncture, the MPC judges that the key CBE rates are currently appropriate given the balance of risks surrounding the inflation and GDP outlooks.

The MPC will continue to closely monitor all economic developments and will not hesitate to adjust the key CBE rates to ensure price stability over the medium-term. 




Wednesday April 15 2015
Egypt Inflation Rate at 5-Month High in March
Central Bank of Egypt | Joana Ferreira | joana.ferreira@tradingeconomics.com

Consumer prices in Egypt increased 11.51 percent year-on-year in March of 2015, up from 10.56 percent in February as cost of food and housing, water, electricity, gas and other fuels rose the most.

Compared to March 2014, food and beverages prices increased 9.15 percent, the strongest growth in five months. Housing, water, electricity, gas and other fuels prices went up by 13.35 percent. Additional upward pressure came from: Medical care (2.00 percent); transportation (22.01 percent); clothing and footwear (7.55 percent); education (24.68 percent); and hotels, cafes and restaurants (16.20 percent).

In contrast, prices of communications fell 0.18 percent.

Annual core inflation edged up for the second consecutive time to 7.21 percent from 7.15 percent last month. 

On a monthly basis, consumer prices rose 1.55 percent. While the majority of prices remained unchanged, food and beverages cost went up by 2.42 percent; housing, water, electricity, gas and other fuels rose 2.81 percent; hotels, cafes and restaurants grew 0.49 percent.

The inflation has been on an upward trend since mid-2014 after the government cut subsidies. 


Friday March 13 2015
Egypt Inflation Rate Accelerates to Double Digit in February
Carolina Cunha | carolina.cunha@tradingeconomics.com

Egypt's consumer prices increased by an annual 10.6 percent in February, after slowing in January, due to higher prices of transport and food. A year ago, inflation rate was 9.76 percent.

Year-on-year, prices of transport went up by 22 percent, the highest annual increase. Costumers paid more for hotels and restaurants (+15.92 percent) and housing, water, gas and electricity (+ 10.25 percent). Prices of clothing and footwear surged by 7.55 percent. 

Food and beverages prices increased by 8.2 percent when compared with the same month of the previous year. While prices of fruits and vegetables jumped 13.56 percent, cost of food excluding fruits and vegetables advanced by 6.71 percent. 

Annual core inflation edge up to 7.1 percent, following a 7.06 percent increase last month. It is the first rise in six months.

On a monthly basis, inflation rate was 2.1 percent, up from a 0.99 percent rise last month.  The increase was mainly driven by higher prices of food (+2.46 percent), hotels and restaurants (+ 1.67 percent) and housing, water, electricity and gas (+1.4 percent). Cost of transport and clothing and footwear were unchanged in February over January.

On January 15, Egypt’s central bank allowed the Egyptian pound to fall against major currencies, after protecting it for the past three years. The devaluation boosted import costs and led to the fastest rise in input prices in seven months. 



Friday February 27 2015
Egypt Leaves Monetary Policy Unchanged
Central Bank of Egypt | Carolina Cunha | carolina.cunha@tradingeconomics.com

The Central Bank of Egypt kept its benchmark overnight deposit rate unchanged at 8.75 percent at its February 26th meeting, after cutting it by 50 bps last month, in an attempt to stimulate the economy while controlling the inflation.

The overnight lending rate, the discount rate and the rate of the CBE’s main operation were also left on hold at 9.75 percent, 9.25 percent and 9.25 percent, respectively.

Excerpts from the press release by the Central Bank of Egypt:

Headline CPI increased by 0.99 percent (m/m) in January compared to a decline of 0.07 percent (m/m) in December. The annual rate declined to 9.66 percent in January from 10.13 percent in December, supported by the favorable base effect from last year. The bulk of the monthly developments came on the back of the administered price adjustments and supply bottlenecks related to the distribution of butane cylinders. On the other hand, core CPI increased by 0.52 percent in January compared to 0.3 percent in December. The annual rate continued to ease registering 7.06 percent in January following 7.69 percent in December. Upside risks on the inflation outlook from domestic supply shocks are largely mitigated by contained imported inflation, against the background of lower oil prices and the consequent downward revision in international food price forecasts. 

Meanwhile, real GDP jumped significantly in 2014/15 Q1, registering at 6.8 percent the highest annual growth rate since 2007/08 Q4. This comes after the 2013/14 fiscal year real GDP growth rate recorded 2.2 percent. Notwithstanding the support stemming from the base effect, the expansion in economic activity during 2014/2015 Q1 came on the back of the continuous growth in the manufacturing sector and the expansion of tourism activities after several quarters of contraction. This came despite the continuous weakness in the extraction sector. In the meantime, investment continued to improve for the third consecutive quarter. Looking ahead, while investments in domestic mega projects such as the Suez Canal are expected to contribute to economic growth, the downside risks that surround the global recovery on the back of challenges facing the Euro Area and the softening growth in emerging markets could pose downside risks to domestic GDP.

At this juncture, the MPC judges that the key CBE rates are currently appropriate given the balance of risks surrounding the inflation and GDP outlooks. 

The MPC will continue to closely monitor all economic developments and will not hesitate to adjust the key CBE rates to ensure price stability over the medium-term.


Monday February 16 2015
Egypt Inflation Rate Slows in January
Carolina Cunha | carolina.cunha@tradingeconomics.com

Egypt annual inflation eased to 9.7 percent in January of 2015 from 10.1 percent in the previous month. A year ago, the inflation rate was recorded at 11.36 percent.

Comparing January 2015 with the same month of the previous year, cost of food and non-alcoholic beverages rose at a slower 5.8 percent, following an 8.4 percent increase in December. Fruits and vegetables prices increased 6.73 percent, down from 13.2 percent in the previous month.

Education cost went up 24.68 percent and transport prices jumped 22.03 percent. Additional upward pressure came from hotels and restaurants (15.08 percent), medical care (14.23 percent); housing, water, electricity and gas (9.32 percent) and clothing and footwear (2.53 percent). 

Year-on-year, core inflation eased for the fifth consecutive month to 7.06 percent from 7.69 percent in the previous period.

On a monthly basis, prices advanced 0.99 percent, following a 0.07 fall in December, as a result of a 3.3 increase in cost of housing, water, electricity and gas and a 0.99 percent increase in food prices. 

Consumer prices rose sharply after the government cut energy subsidies in July of 2014, reaching an eleven-month high 11.8 percent in October. Since then, inflation has been on a downward trend due to a slowdown in food cost. As a result, the Central Bank of Egypt cut its benchmark overnight deposit rate by 50bps to 8.75 percent on January 15th.