Egypt: Inflation remains far too high for comfort in June
July 26, 2017
In June, urban consumer prices rose 0.82% from the previous month, dropping significantly from May’s 1.67% and marking the lowest rate since July 2016. This marks the fifth consecutive monthly decline, suggesting the impact of the huge depreciation of the Egyptian pound observed late last year is beginning to wane. Mercifully for the country’s battered consumers, rises in prices for food and beverages were much more moderate than in the previous month, with prices for fruit and vegetable falling sharply. Price pressures mainly came from a significant price increase in the price of clothing and footwear associated with Eid al-Fitr. Core consumer prices—which exclude some of the hardest-hit commodities such as several food products and regulated utilities—rose 1.80%, down from May’s 1.99%.
Urban inflation ticked up marginally in June, coming in at 29.8% (May: 29.7%), although the figure was dampened by a favorable base effect. Meanwhile, annual average inflation rose from 22.2% in May to 23.5% in June.
Author: Oliver Reynolds, Economist