Egypt’s annual urban consumer price inflation rate declined to six percent in June, down from 8.9 percent in June 2019, and increasing by 1.3 percent, compared to May, the Central Agency for Public Mobilisation and Statistics (CAPMAS) announced on Thursday.
According to the agency's monthly bulletin, the monthly inflation went down by 0.1 percent in June, compared to May.
Food and beverage prices declined by 1.6 percent, compared to May, but it increased by 0.4 percent on an annual basis in June compared to the same month in 2019.
In May, Egypt’s annual urban consumer price inflation rate declined to 4.7 percent, down from 5.9 percent in April, recording the lowest figure in six months, according to CAPMAS.
CAPMAS attributed the May decline to the 0.3 percent year-on-year drop in food and beverage costs, which reflects the decreasing demand on such commodities during the Muslim holy month of Ramadan. Usually, demand hikes on food and beverage items during Ramadan.
It also announced that the urban inflation on monthly basis registered zero percent for the second month in a row.
Meanwhile, the Central Bank of Egypt said the annual core inflation rate dropped to 1.5 percent year-on-year in May, down from 2.5 percent in April.
In April, Egypt’s annual urban inflation recorded 5.3 percent, down from 7.2 percent in January, with monthly inflation recording zero percent, according to CAPMAS.
The annual inflation for rural Egypt recorded 4.5 percent in February, with monthly inflation recording -0.1 percent.
Inflation in Egypt is expected to reach 7.3 percent by the end of the current quarter, according to Trading Economics (TE) global macro models and analysts’ expectations.
TE estimates Egypt’s inflation rate to stand at 8.5 percent in 12 months’ time, while it is projected to trend around 7.6 percent in 2021 and 7.5 percent in 2022 on the long-run.
In October, the International Monetary Fund (IMF) lowered its forecast for Egypt’s consumer price index (CPI) to 9.6 percent for fiscal year (FY) 2019/2020, down from 10.7 percent.
The IMF expected Egypt’s inflation rate to slow down to 7.4 percent in FY 2020/2021 and seven percent in FY 2021/2022, according to the IMF’s fifth and final review of Egypt’s economic reform programme.
The fund also projected that Egypt’s economic growth will reach 5.9 percent during FY 2019/2020.
In June, Egypt received the first tranche of the stand-by agreement loan from the IMF worth $2 billion to finance the second wave of Egypt’s economic reform programme.
In May, Egypt received a $2.4 billion loan from the IMF under the rapid finance facility to address the repercussions of the COVID-19 outbreak on the Egyptian economy.