Egyptian inflation in the year to June eased slightly to 11.8 per cent on the back of a slowdown in annual food prices, the state statistics agency CAPMAS reported on its website on Sunday.
Annual headline inflation grew to 12.1 per cent in April, slowing in May when it reached 11.9 per cent before continuing its dip in June.
But monthly inflation has begun to inch up again, as recent hikes in food and tobacco have gained pace. Prices climbed from 0.2 per cent in May to 0.4 per cent in June, having fallen from 1.25 per cent in April.
Some analysts predict hikes are likely to continue in the run-up to Ramadan in early August, typically a time of increased consumption.
"Inflation is being driven by Egypt's reliance on imported foods for its large population," says Monette Doss, research manager at Prime Securities, citing figures that show 40 per cent of the country's foodstuffs come from outside its borders.
"The main source of inflation in Ramadan will be food and beverages but this is likely to be balanced to an extent by stasis in other areas."
Doss predicts inflation will climb but "won't exceed 14 or 15 per cent" during the month of Ramadan before falling back to around 12 per cent "the average for the year". Nonetheless, she calls the recent upwards trend "not a good sign".
Magda Kandil, director of the Egyptian Center for Economic Studies, recently told Ahram Online that the combination of the holy month and the introduction of a minimum wage for some public sector workers was likely to increase inflationary pressures over the summer.
Some disagree. Simon Williams, chief economist at HSBC Middle East, expects inflation to ease in July and predicts the central bank will leave its benchmark overnight deposit and lending rates unchanged in its meeting on 21 July.
"The flat headline number masks weaker underlying inflationary trend. I expect to see price growth in single digits next month for the first time in two years," he told Reuters.
A Reuters poll on 21 June forecast inflation, one of the key triggers of the mass demonstrations that toppled Mubarak, would accelerate slightly to an average of 12 per cent in the 2011/12 financial year, before falling to 10.1 per cent the year after.