Inflation figures in January continue December’s performance from a year-on-year perspective, but diverge when compared month-on-month, according to a recent report by Shuaa’s Egypt Macro recent report which predicted the acceleration is unlikely to have a major effect on the annual rate.
Pointing to the figures that CAPMAS released on Tuesday, the report said that January’s monthly inflation rate is the first positive monthly inflation reading since October 2019 and the second in five months thanks to the increase in food and beverage prices by 1.7 percent month on month.
Egypt’s annual inflation rate was 7.2 percent in January, up from 7.1 percent in December. The month-on-month rate was 0.69 percent, up from a drop of 0.23 percent in December.
“A muted acceleration in January resulted from weak growth in the food and non-alcoholic beverage category,” read the report, noting that the category’s readings for rural Egypt showed a negative reading of 0.3 percent year on year.
“While [the inflation rate rises] reflect underlying price escalation from a monthly point of view, we do not think that such an acceleration is likely to spill over into bold movements in annual readings,” argued the report.
The report predicts that Egypt’s annual inflation rate will range between 6-8 percent.