Inflation accelerates in May: Egypt’s annual headline inflation rose to 14.1% in May from 13% in April, the CBE said in a statement on Monday (pdf). A 15.1% increase in food and nonalcoholic beverages prices, up from a 13% increase the previous month, contributed to the jump, CAPMAS said. Month-on-month inflation was at 1.1% in May, up from 0.5% the previous month, the statistics agency said, while annual core inflation came at 7.8%, down from 8.1 percent in April. The story was also picked up in the foreign press: Reuters | Bloomberg.

The latest figures came as a surprise to analysts: “Inflation in May came slightly above our expectations of 12.8% y-o-y and 0.5% m-o-m, which was based on the surprisingly low April inflation,” Pharos said in a research note.

Don’t expect a rate cut anytime soon: The higher-than-expected inflation means that the CBE will likely delay cutting key interest rates, Capital Economics said in a note. “Policy makers will also want to await more details on upcoming subsidy cuts and assess the impact that they will have on inflation,” Jason Tuvey, senior EM economist, said. The CBE kept its overnight deposit and lending rates on hold last month and is expected hold back from any easing until 4Q2019 at the earliest.

Expect inflation to continue on its upward trajectory this month as the government slashes subsidies. “Going forward, we expect annual inflation to hover around 14% during the summer as the period between June – August 2019 will witness anticipated fiscal consolidation measures as well as a historically high inflation season,” Pharos said.