Egypt: Inflation declines to two-and-a-half-year low
September 10, 2015
In August, consumer prices increased 0.6% over the previous month, which was slightly below the 0.7% increase recorded in July. According to the Central Agency for Public Mobilization and Statistics, the increase was mainly driven by higher prices for food and non-alcoholic beverages as well as for clothing and footwear.
Inflation declined from 8.4% in July to 7.9% in August, which marked the lowest level since March 2013. The lower result reflects a base effect due to the jump in inflation last summer after the government cut energy subsidies in July. The cut in energy subsidies was part of an ongoing fiscal reform program designed to reduce the large fiscal deficit. Moreover, annual average inflation decreased from 10.8% in July to 10.5% in August. Core consumer prices, which exclude volatile items such as fresh fruit and vegetables, rose 5.6% over the same month last year, which was below the 6.5% increase seen in the previous month.
Author: Carl Kelly, Economist