Egypt Inflation July 2017

Egypt

Egypt: Inflation rears its head again in July as reform measures make themselves felt

August 25, 2017

In July, urban consumer prices rose 3.2% from the previous month, up sharply from June’s 0.8% increase and stopping a run of five consecutive slowdowns in monthly price changes. The large uptick was largely driven by recently implemented government reform measures, in particular an increase in VAT to 14% and sweeping cuts to fuel subsidies, which have seen prices at the pump soar. The prices of key sub-category food and beverages recorded a more modest rise in July. Core consumer prices—which exclude several food products and regulated utilities—rose 2.76% in July, up from June’s 1.80%.

Urban inflation picked up to a multi-year high of 33.0% in July from 29.8% in June. Meanwhile, annual average inflation rose from 23.5% in June to 25.1% in July.

Inflationary pressures may continue to build temporarily in the next few months, as the impact of recent fuel and electricity price hikes feed through to prices. However, looking further ahead, the gradual fading-out of the one-off effects of the government’s reform measures and significantly tighter monetary policy should tame inflation. FocusEconomics Consensus Forecast participants expect inflation to average 24.5% in calendar year 2017, and 14.9% in calendar year 2018.


Author:, Economist

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Egypt Inflation July 2017

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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