Egypt’s annual urban consumer price inflation rate declined to 4.7 percent in May, down from 5.9 percent in April, recording the lowest figure in six months, the Central Agency for Public Mobilisation and Statistics (CAPMAS) said on Wednesday.

CAPMAS attributed the May inflation rate decline to the 0.3 percent year-on-year drop in food and beverage costs, which reflects the decreasing demand on such commodities during the Muslim holy month of Ramadan. Usually, demand hikes on food and beverage items during Ramadan.

It also announced that the urban inflation on monthly basis registered zero percent for the second month in a row.

Meanwhile, the Central Bank of Egypt said the annual core inflation rate slipped to 1.5 percent year-on-year in May, down from 2.5 percent in April. 

In April, Egypt’s annual urban inflation recorded 5.3 percent, down from 7.2 percent in January, with monthly inflation recording zero percent, according to CAPMAS.

The annual inflation for rural Egypt recorded 4.5 percent in February, with monthly inflation recording -0.1 percent.

Inflation in Egypt is expected to reach 7.3 percent by the end of the current quarter, according to Trading Economics (TE) global macro models and analysts’ expectations.

TE estimates Egypt’s inflation rate to stand at 8.5 percent in 12 months’ time, while it is projected to trend around 7.6 percent in 2021 and 7.5 percent in 2022 on the long-run.

In October, the International Monetary Fund (IMF) lowered its forecast for Egypt’s consumer price index (CPI) to 9.6 percent for fiscal year (FY) 2019/2020 from 10.7 percent.

The IMF expected Egypt’s inflation rate to slow down to 7.4 percent in FY 2020/2021 and seven percent in FY 2021/2022, according to the IMF’s fifth and final review of Egypt’s economic reform programme.

The fund also projected that Egypt’s economic growth will reach 5.9 percent during FY 2019/2020.

In May, Egypt received a $2.77 billion loan from the IMF under the rapid finance facility (RFI) to address the repercussions of the COVID-19 outbreak on the Egyptian economy.

On Friday, Egypt and the IMF reached a staff-level agreement, paving the way for Egypt to receive another loan under the standby agreement (SBA) that is expected to be decided by the IMF’s Executive board by the end of June.