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Egypt's annual headline inflation hit 30-month high in June to 14.8pct

Ahram Online , Sunday 10 Jul 2016
Egypt
Egyptians shop at a vegetable market in Cairo, Egypt June 15, 2016 (Reuters)
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Egypt’s annual headline inflation hit the highest level in 30 months to register 14.8 percent in June 2016 from 12.9 percent in May and compared to 11.5 percent in the same month last year, state statistics body CAPMAS said in an emailed statement on Sunday.

The average inflation rate eased to 10.7 percent in the fiscal year 2015/16 compared to 11 percent in the last fiscal year, CAPMAS said.

However, the monthly Consumer Price Index (CPI) rose by 0.8 percent, slightly less than the previous month’s increase of 3.2 percent.

CAPMAS has attributed the CPI annual rise to the food and beverage price hikes, which recorded 18.4 percent year-on-year in June in addition to a 33.2 percent jump in healthcare prices during the same period.

Accordingly, the Central Bank of Egypt (CBE) announced that the annual core CPI increased to 12.37 percent in June from 12.23 percent in May.

The Central Bank of Egypt (CBE) raised interest rates by 100 basis points after the core inflation rate hit a seven-year high in May.

The bank raised the overnight deposit rate, the overnight lending rate and the rate of the CBE's main operation to 11.75 percent, 12.75 percent and 12.25 percent respectively.

In March, Egypt, which relies heavily on imports of wheat and other staples to feed its population of 90 million, weakened the Egyptian pound by 14 percent of its value against the dollar in an attempt to eliminate the black market, a move that led to price increases.

Another devaluation is expected during the fiscal year 2016/17, starting July, to tighten the gap between the official and informal rates of the US dollar, Reuters reported earlier the month citing economists. 

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