Food price decreases drag down November inflation

Yomna Abo Ouf and Bassem Abo El Abas, Thursday 9 Dec 2010

November inflation unexpectedly fell from 10.97 percent in October to 10.8 percent in November.

November inflation
November inflation rate fell because food prices eased compared to October's. (photo: Reuters)

Egypt’s annual urban inflation unexpectedly fell to 10.18% in November 2010 from 10.97% in October 2010, according to the Central Agency for Public Mobilization and Statistics (CAPMAS).

The drop comes to an unexpected fall in annual food price, Beltone Financial said. 

November witnessed a shrinking food and beverage index (-2.24%) compared to a meager -0.16% in October. This had its impact on the annual food price inflation, which fell to 17.1% in November from 19.31% in October 2010.

Higher consumption levels ahead of Ramadan and supply shortages in the domestic market was the real engine behind the prices increases in October.

Most of the CPI items saw limited monthly changes in November 2010, except for clothing and footwear, which rose 2.2% m-o-m in November compared to -1.1% in October 2010.

A poll conducted by Ahram Online on Wednesday showed only one of  five analysts interviewed predicted the decrease of the inflation rate.

"It will fall," Sherif Dalawer, an economic expert, told Ahram Online yesterday. Dalawer expected that a slip of local demand would bend price increases. 

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