Urban inflation dips to lowest level since July
Annual urban inflation slowed for the second month running in November as pressure on food prices continued to ease, according to official figures released on Thursday. The headline rate fell to 5.6% last month from 6.3% in October, the lowest rate since July and within the lower end of the central bank’s target range of 5-9% for 4Q2022. On a monthly basis, consumer prices rose ever-so-slightly by 0.1%, following October’s 1.1% rise.
Behind the dip: A softening of food and beverage prices, mostly, as well as a base effect from last year’s figures, Al Ahly Pharos’ head of research Radwa El Swaify told us. Food and beverage price inflation, which makes up the largest component of the basket of goods used to measure prices, slowed to 8.1% on an annual basis from 11.5% in October, and fell 0.5% m-o-m from October.
Tempering food prices masked inflation in other areas of the economy: Annual core inflation — which strips out volatile items such as food and fuel — hit a new 28-month high in November, reaching 5.8% from 5.2% in October, according to central bank figures (pdf).
Also getting pricier last month: Housing utilities and gas prices rose 3.7%, up from 3.1% the previous month. Clothing and footwear prices inched up by an annual rate of 1.2% in November, up from 1.9% in October, while recreation and culture increased notably by 14.8%. Education rose 12.7% mainly due to an increase in preschool and primary education fees, which jumped at the annual rate of 19.5%.
Inflationary pressures could ease in the coming months with a slump in international oil prices, HC Securities wrote in an emailed note. The firm expects inflation to average 5.8% in the last quarter of the year.