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.
Author: Oliver Reynolds, Economist