Egypt's annual core inflation hits to 4.3% in January: CBE

CAIRO – 10 February 2021: The annual core inflation rate reached 4.3 percent in January 2021, down from 5.4 percent in December 2020, the Central Bank of Egypt (CBE) said in a statement.

The Consumer Price Index in Egypt has recorded a monthly rate of negative 0.4 percent in January, compared to 0.7 percent for the same month last year, and to negative 0.4 percent in December 2020, the statement added.

Core inflation discounts or strips out certain categories that are considered more volatile.

Egypt’s annual consumer price inflation recorded 4.8 percent in January 2021, compared to 6.8 percent in January 2020, state-statistics body said Sunday. 

On a monthly basis, inflation recorded 110.2 points in January 2021, marking a decrease of 0.4 percent compared to December 2020, the Central Agency for Public Mobilization and Statistics (CAPMAS) said.  

CAPMAS attributed the dip in inflation to the decrease in prices of some commodities during the month, as the  vegetables group by 20.4 percent, readymade clothes by 0.1 percent, the transportation services group by 0.6 percent, and the hotel services by 0.6 percent.

The agency pointed out that this came despite the increase in the prices of the fruit group by 5.4 percent, the meat and pourtly group by 5.2 percent, and the housing rental group by 0.3 percent.

The sustainable development plan for 2020/2021 expected the inflation rate to increase to 9.8 percent if coronavirus crisis continued until December 2020. 

Inflation remains within the Central Bank of Egypt’s (CBE) target range of 9 percent, plus or minus 3 percentage points, despite the precautionary measures taken aiming to curb the spread of coronavirus that are expected to raise the rate of inflation.

The Monetary Policy Committee of the Central Bank of Egypt (CBE) decided Thursday, Feb. 4, to keep the overnight deposit rate, overnight lending rate, and the rate of the main operation unchanged at 8.25 percent, 9.25 percent, and 8.75 percent, respectively. Moreover, the discount rate was also kept at 8.75 percent.

Egypt's 2020/2021 draft budget aims to reduce public debt of GDP to 82.7 percent by end of June 2021, up from earlier target of 82.5 percent by the end of June 2020 and to 77.5 percent by the end of June 2022.