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Inflation rises to 14.4% in June in line with expectations - Daily News Egypt

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Inflation rises to 14.4% in June in line with expectations

Egypt’s annual inflation rate rose significantly in June to 14.4%, increasing from 11.4% in May, the Central Bank of Egypt (CBE) announced on Tuesday. The increase was due to a rise in food prices by 10% compared to an increase of 8.6% in May, in addition to the 55% hike in transportation sector on the …


Egypt’s annual inflation rate rose significantly in June to 14.4%, increasing from 11.4% in May, the Central Bank of Egypt (CBE) announced on Tuesday.

The increase was due to a rise in food prices by 10% compared to an increase of 8.6% in May, in addition to the 55% hike in transportation sector on the back of the June gasoline price increase, which also affected the housing and utilities sector, rising by 18.4% in June up from 10.6% in May.

Furthermore, according to the data released by the CBE, monthly inflation rose 3.5% in June compared to the 0.2% increase in the previous month. The transportation sector was the main contributor to the inflation rise, as it was hiked by 34.2% on a monthly basis.

According to a research note issued by Beltone Financial, the first quarter of fiscal year (FY) 2018/19 is expected to witness a continued rise in inflation on a monthly basis due to seasonal Islamic holidays and summer holidays. However, the increase will be at a slower pace, due to relatively slower consumption as a result of pressures on income.

Beltone forecast that the average monthly inflation will rise by 2% between June and September 2018.

“Inflation remains within the target range of the central bank; revenues are high; we emphasise our vision of consistently keeping interest rates until the end of 2018,” the research note stated.

Beltone concluded that they believe that June inflation would be the highest in the remaining half of the calendar year 2018, which is still within the target range of the central bank at 13% (+/-3%) by the end of 2018.

On the other hand, revenues—fixed income securities market— have maintained a recent rise to 19.4%, keeping the Egyptian fixed income securities market attractive among emerging markets. From this perspective, Beltone reiterated their vision that the CBE will maintain interest rates unchanged at the meeting on 16 August and the next three meetings in 2018.

Topics: inflation

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https://wwww.dailynewssegypt.com/2018/07/10/inflation-rises-to-14-4-in-june-in-line-with-expectations/
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