Back to the complete issue
Sunday, 12 December 2021

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.

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; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.