Egypt: Inflation drops slightly in December
January 11, 2021
Consumer prices decreased 0.42% in December over the previous month, which contrasted November's 0.82% increase. Looking at the details of the release, falling prices for food and non-alcoholic beverages dragged the overall reading lower in December.
Inflation came in at 5.4% in December, below November’s 5.7%. December's figure represented the first drop in the inflation rate since August. Accordingly, the trend pointed down slightly, with annual average inflation coming in at 5.0% in December (November: 5.2%). Meanwhile, core inflation inched down to 3.8% from November’s 4.0%.
Regarding December’s reading, Farouk Soussa, economist at Goldman Sachs, commented:
“We maintain our forecasts for sequential monthly CPI, and the decline in December now mechanically decreases our medium-term yoy projections. Real rates remain at historically high levels, and we see inflation averaging +4.6%yoy in H1 2021, subdued by sluggish domestic demand, a strengthening Pound, and quarterly fuel price indexation reducing potential volatility from global energy prices.”
Author: Stephen Vogado, Economist