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Sunday, 26 May 2019

Easing figures of Egypt's annual headline inflation in line with expectations

Reuters , Wednesday 10 Apr 2019
The Egyptian Central Bank offices in Cairo, Egypt (AP)
The Egyptian Central Bank offices in Cairo, Egypt (AP)
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Egypt's annual urban consumer price inflation eased to 14.2 percent in March from 14.4 percent in February, statistics agency CAPMAS said on Wednesday.

Analysts said the figures were in line with expectations.

"Inflation was expected to hover around the 14 percent level given expected volatility in prices of food and vegetables," said Allen Sandeep, head of research at Naeem Brokerage.

But food supply issues appear to have eased, he said, adding that food and non-alcoholic beverages price increases were down to 1.5 percent from 3.5 percent month-on-month.

Egypt has implemented a series of tough austerity measures to help meet the terms of a $12 billion IMF loan programme it signed in late 2016. As part of the IMF deal, it is set to phase out subsidies on most fuel in June, which could add to inflationary pressures.

"Annual inflation will stabilise between 14 and 15 percent during August and the effects of lifting subsidies on fuel products are expected to be seen more in the monthly figures than the annual figures," said Radwa El-Swaify, head of research at Pharos Securities Brokerage.

Urban consumer price inflation was 14.4 percent in February, rising from 12.7 percent in January and 12 percent in December. Inflation had hit a high of 33 percent in July 2017.

The central bank held rates steady at its March 28 meeting, after a surprise cut in February.

Central bank policymakers who target inflation of 13 percent plus or minus 3 percentage points, meet next on May 23. 

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