Egypt: Inflation drops sharply in November
December 10, 2017
In November, urban consumer prices rose 0.97% from the previous month, down from October’s 1.10% uptick. November’s price increase was driven by higher regulated prices, on the back of higher taxes on tobacco. Meanwhile, a notable fall in fresh vegetable prices put downward pressure on the overall monthly inflation figure. Core consumer prices, which exclude several food products and regulated utilities, increased 1.31% in November month-on-month, up from 0.70% in October.
Urban inflation fell from 30.8% in October to 26.0% in November, marking the fourth consecutive decline but supported by a favorable base effect. It now appears more likely that the country is finally over the inflation hump, after inflation peaked in July on the back of fuel and electricity subsidy cuts; this will be seen as a vindication of the Central Bank’s tight monetary stance. Meanwhile, annual average inflation rose from 29.3% in October to 29.8% in November.
Egypt Inflation Forecast
Looking ahead, inflation should gradually decline as the impact of the government’s reform measures lessen. FocusEconomics Consensus Forecast participants expect inflation to average 14.7% in calendar year 2018 and 11.6% in calendar year 2019.
Author: Oliver Reynolds, Economist