Egypt’s annual core inflation falls to 10.9% in June: CBE

CAIRO – 11 July 2018: The Central Bank of Egypt (CBE) said that Egypt’s annual core inflation rate declined to 10.9 percent in June 2018 from 11.09 percent in May 2018, according to a report.

On a monthly basis, core inflation recorded 3.5 percent in June 2018, compared to 0.2 percent in May.

Core inflation discounts or strips out certain categories that are considered more volatile.
The Central Agency for Public Mobilization and Statistics (CAPMAS) announced that annual consumer price inflation slipped to 13.8 percent in June 2018, from 30.9 percent in the same month of 2017.

On a monthly basis, inflation increased 2.9 percent in June, compared to the previous month, to record 282.7 points, the Central Agency for Public Mobilization and Statistics (CAPMAS) said.

Inflation has surged in Egypt since the floatation of the Egyptian pound in November 2016, reaching a high record level in July due to energy subsidy cuts and has gradually eased since July.

The annual consumer price inflation slipped to 11.4 percent in May 2018, from 13.1 percent in the previous month; additionally, the annual core inflation rate declined to 11.1 percent in May 2018 from 11.6 percent in April 2018.

The Egyptian government expected inflation to decline by the end of 2017/2018 from 17 percent to 13 percent, according to former Minister of Finance Amr el-Garhy.

International financial and research organizations predicted that the inflation will continue its downtrend till the end of 2017/2018 fiscal year; Fitch Rating expected that inflation in Egypt will fall but will remain in double digits, averaging around 13 percent, assuming that subsidy reform in July will lead to energy price increases, given the increase in oil prices.

On June 16, the Cabinet released the new prices of fuel to lower the fuel subsidy to 25 percent.

Gasoline 95 prices went up from LE 6.6 ($ 0.37) per liter to LE 7.7, while 92 octane gasoline prices amounted to LE 6.75 instead of LE 5 per liter. Prices of gasoline 80's liter increased to LE 5.5 instead of LE 3.65.

The IMF said in a report earlier that it expected inflation to fall to 12 percent by June and to single digits by 2019.