Egypt Inflation June 2019

Egypt

Egypt: Inflation slumps in June but is set to climb again in July on fuel subsidy cuts

July 10, 2019

Consumer prices fell 0.8% in June compared to the previous month, contrasting the 1.1% rise in May. The decrease in June was overwhelmingly due to lower prices for food and beverages.

Inflation decelerated rapidly in June, hitting 9.4%, down from 14.1% in May and coming close to the 9.0% midpoint of the Central Bank’s Q4 CY 2020 target range of 6.0% to 12.0%. June’s reading was significantly lower than market analysts had expected and represented the lowest reading since March 2016. For its part, core inflation slowed to 6.4% in June, down from 7.8% in May. Annual average inflation moderated to 13.9% in June from 14.3% in May.

Looking ahead, inflation is likely to climb again in July as the effects of fuel subsidy cuts, which were implemented at the start of the month by the government, become felt. The subsidy cuts were a requirement of the three-year IMF support program that Egypt signed up to in November 2016 and will soon complete.

FocusEconomics Consensus Forecast panelists expect inflation to average 12.4% in CY 2019, which is up 0.1 percentage points from last month’s forecast, and 10.1% in CY 2020.


Author:, Economist

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Egypt Inflation Chart


Egypt Inflation June 2019 0

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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