Annual urban inflation has hiked to register 9.8% in December, up from 8.5% in November, the Central Agency for Public Mobilization and Statistics (CAPMAS) stated in a Thursday statement.
CAPMAS attributed the jump to increasing prices of food and beverage products by 8.4% affected by high prices of vegetables, fruits, meats, dairies and seafood.
In July, inflation rates witnessed their highest surge since 2008, affected by the government’s decision to reduce spending on energy subsidies and to raise the prices of fuel and gas products in an attempt to reduce the 14% GDP budget deficit, according to CAPMAS.
However, the International Monetary Fu
nd (IMF) mission statement on Egypt, issued in late November, stated that interest rate actions adopted by the Central Bank of Egypt (CBE) after the July price increases have helped anchor inflation expectations.
Affected by the reduction of international oil prices, inflation rates are expected to reduce, a study by Dcode economic and financial consulting firm said in December, adding that the subsidy bill at the current oil prices per barrel would decline by EGP 25bn.
The decline of international oil prices will have a positive short-term impact on FY 2014/2015 real economy, fiscal accounts and price levels, the study added.