Egypt: Inflation rises in September
October 8, 2020
Consumer prices increased 0.27% in September over the previous month, contrasting the 0.15% drop recorded in August. The figure was primarily due to a more moderate drop prices for food and non-alcoholic beverages. In addition, price pressures for transportation also grew, likely reflecting a rise in Cairo metro costs at the end of August.
Inflation came in at 3.7% in September, which was up from August’s 3.4%. Meanwhile, the trend pointed down mildly, with annual average inflation coming in at 4.9% in September (August: 5.0%). Lastly, core inflation rose to 3.3% from the previous month's 0.8%.
Regarding the consequences for monetary policy, Farouk Soussa, economist at Goldman Sachs, commented:
“We believe the persistent disinflationary trend observed over the course of this year raises the chances of further monetary easing before end-2020, following the 50bp cut in September. According to the terms of the IMF SBA agreed in July, the <4%yoy September inflation print will trigger a consultation between the Egyptian Authorities and the IMF Board, potentially increasing the likelihood of a cut when the CBE meets again on November 12.”
Author: Stephen Vogado, Economist