Egypt’s annual inflation drops to 15.4% in September

CAIRO – 10 October 2018: Egypt’s annual consumer price inflation slipped to 15.4 percent in September 2018, compared to 32.9 percent in the same month of 2017 that rose due to the flotation of the Egyptian currency, state-statistics body said Wednesday, Oct. 10.

In August, Egypt’s annual consumer price inflation fell to 13.6 percent, compared to 33.2 percent in the same month of 2017.

On a monthly basis, inflation increased 2.6 percent in September, compared to the previous month, to record 302.7 points, the Central Agency for Public Mobilization and Statistics (CAPMAS) said.

CAPMAS attributed the increase in inflation on a monthly basis to the rise of some commodities' prices as vegetables by 17.2 percent, fruit by 7.4 percent, and food and drinks by 4.6 percent.

Additionally, the prices of fish and seafood group increased 0.3 percent to contribute by 0.01 percent in the rate of monthly change.

Inflation 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 gradually easing since July.

The International Monetary Fund (IMF) expected Egypt’s inflation to decline to 20.9 percent in 2018, compared to 23.5 percent in 2017, anticipating it to reach 14 percent in 2019 and 7 percent in 2023.

Meanwhile, the World Bank said that headline inflation remained at high levels of 21.6 percent during 2017/2018, but started to recede significantly by the end of the year, adding that core inflation returned to single digits in July 2018.

The World Bank clarified that the increase of energy prices caused a temporary rise in headline inflation to 14 percent on an average during June to August.

HC Securities & Investment also forecasted that Monetary Policy Committee (MPC) will keep rates unchanged in the fourth quarter of 2018, with anticipations that inflation will hit 14.8 percent from September to December.

“We expect the annual inflation rate to average 14.8 percent over September–December,” Equity Analyst – Macro & Banking Sector at HC, Monette Doss added.

Egypt targets an inflation rate of 13 percent in its fiscal year 2018/2019 budget.