Egypt annual inflation eases

 

Egypt’s annual urban consumer price inflation eased slightly in August to 31.9 per cent from 33 per cent in July, the official Capmas statistics agency said on Sunday.

Inflation soared to a record high in July on the back IMF-backed fuel and energy subsidy cuts by the government, as a condition of a US$12 billion three-year loan programme.

“I’d expected this to widen, because usually it takes a couple of months for the subsidy cuts to actually reflect on prices but this is definitely positive,” said Allen Sandeep, the head of research at Naeem Brokerage in Cairo.

Import-dependent Egypt has been hit by soaring inflation since it floated its currency in November, and since then the pound has about halved in value.

“There has been minimal appreciation of the pound. If it gets a little more sizeable then we could actually see inflation cooling off even before November,” Sandeep said.

The central bank raised its key interest rates by 200 basis points in a surprise move in July, seeking to ease the inflationary pressure, but has kept them steady since.

 

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