Egypt Inflation

Inflation rises in July from the prior month

Latest reading: Consumer prices were up 14.9% in annual terms in July, following a 14.3% increase in the prior month and coming in below market expectations. Relative to the prior month's data, there were higher price pressures for food and non-alcoholic beverages—the largest component in the consumer price index basket— (+8.0% on a year-on-year basis vs +5.4% in June) and housing and utilities (+41.2% vs +41.1% in June). In contrast, price pressures reduced for transportation in July (+24.4% vs +24.5% in June). Meanwhile, core consumer prices were up 14.7% in annual terms in July, following a 14.3% increase in the prior month. Finally, consumer prices were unchanged in July on a month-on-month basis, following a 0.41% decline in the previous month.

Panelist insight: On the inflation outlook and its implications for monetary policy, Goldman Sachs’ Farouk Soussa said: “We expect inflation to rise further in August to around 15.5%, partly due to recently announced electricity tariff hikes, the second this year. While we are forecasting some moderation in Q3, we think inflation will remain sticky, ending the year at above 15%. In our view, this is likely to mean that the CBE will remain on hold until the end of the year.”

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