Back to the complete issue
Sunday, 12 August 2018

Inflation cools in July to 13.5% after surge in June

Inflation cools in July to 13.5% after surge in June: Annual headline inflation cooled to 13.5% in July, down from a high of 14.4% in June, according to data released by the central bank on Thursday (pdf). Monthly headline inflation reached 2.5% in July, according to data from CAPMAS. Annual core inflation — the CBE’s preferred gauge, which strips away volatile items such as food — sank further in July to 8.5%, down from 10.9% in June. Inflation levels in June had accelerated for the first time in a year and at a much faster pace than expected, after dropping to a two-year low in May, as a result of subsidy cuts to fuel, power, and transportation in July. “We expected the hike to be fully apparent in June and the reduced spending levels would let the impact fade away in July,” Beltone Financial’s Alia Mamdouh tells Reuters.

Analysts still expect the CBE’s Monetary Policy Committee (MPC) to keep the country’s key interest rates on hold at its 16 August meeting, despite the decline in inflation rates, the newswire notes. A number of experts had suggested last month that the MPC is likely to keep overnight deposit and lending rates unchanged at 16.75% and 17.75%, respectively, until the end of the year to allow the economy more time to fully absorb the shock of price hikes.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Etisalat Misr (tax ID: 235-071-579), the leading telecoms provider in Egypt; and Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt.