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Egypt inflation expects slight increase

Inflation is expected to be slightly up, Ahram Online poll finds

Yomna Abo Ouf and Bassem Abo Al Abass, Wednesday 8 Dec 2010
Inflation rates
A slight increase in the official inflation rates led by the food upsurge prices, was the result of the poll
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Inflation is expected to increase slightly, a poll by Ahram Online found.

Four analysts out of five predicted a slight  increase of inflation rate, which will be announced tomorrow, Thursday December 9.

The Consumer Price Index (CPI) for November is expected to increase less than 0.8% on monthly basis.

“We believe November's reading to come slightly above October's," said Alia Mamdouh, economist at CICapital research department. She expects annual headline CPI of 11.1%, "given the increased demand over the Adha-Feast coupled with high oil prices that should lift up food prices."

Prime Group's assistant manager Monette Doss said, "Demand eases in winter, this lifts pressure on prices". She added that the CPI will increase, "influenced by the strongbase effect, as November 2009 witnessed an exceptionally low inflation rate."

Egypt’s main inflation rate was unchanged in October, leaving the central bank room to keep its benchmark interest rates at a four-year low to support economic growth.

Urban inflation, the main indicator monitored by the central bank, stayed at 11 percent, according to the website of the Central Agency for Public Mobilization and Statistics.

The Central Bank monetary policy committee will convene on December 14 to decide on the interest rates.

CICapital predicts 2010 annual inflation rate to average 11.3%, down from 11.9% in 2009, yet not reflecting a real ease in prices but mainly influenced by the strong base effect as CAPMAS started the 9th series of the consumer price index in January 2010.

     According to the International Monetary Fund, inflation "remains elevated". The international institution warned that persistently  high headline inflation "risks generating inflationary momentum through its effect on expectations".

In a February 2010 statement, the IMF had advised that Egypt's central bank to bring down inflation toward partner country levels as a key objective for the coming years.

 

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