Egypt Inflation June 2018

Egypt

Egypt: Inflation accelerates in June amid government subsidy cuts

July 10, 2018

In June, urban consumer prices rose 3.46% from the previous month, substantially more than May’s 0.17% increase. June’s increase was driven by higher prices for food, but also reflected recent fiscal tightening measures enacted by the government: On 2 June, the price of piped drinking water was increased by nearly 50%; electricity prices were hiked on 19 June; and subsidies were cut for a range of energy products on 23 June.

Urban inflation accelerated in June to 14.4%, up from 11.4% in May and ending the ten-month run of slowing inflation. Urban core inflation decelerated to 10.9% in June from 11.1% in May. Meanwhile, annual average inflation decelerated to 20.9% in June from 22.1% in May.

Looking ahead, inflation could rise in the short term as the impact of subsidy cuts continues to feed through to prices, but should then resume its downward trend as the impact of the reform measures lessens. However further subsidy cuts could see price pressures flare up again. FocusEconomics Consensus Forecast participants, surveyed over the past month, expect inflation to average 14.1% in calendar year 2018 and 11.9% in calendar year 2019.


Author:, Economist

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Egypt Inflation Chart


Egypt Inflation June 2018

Note: Year-on-year and month-on-month variation of urban consumer price index in %.
Source: Central Agency for Public Mobilization and Statistics (CAPMAS).


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