Annual inflation in Egypt's cities drops to 11.4%

Annual inflation in Egypt's cities drops to 11.4%

Egypt’s annual consumer price inflation fell to 11.4 percent in May from 13.1 percent in April, the Central Agency for Public Mobilization and Statistics (CAPMAS) said on Sunday, a drop from the International Monetary Fund.
On a monthly basis, consumer price inflation in urban areas fell to 0.2 percent in May from 1.5 in April. An analyst welcomed the figures as “good news for the markets” and said it could boost some speculation that the central bank will cut interest rates at the next monetary policy committee meeting scheduled for June 28. “Assuming the figures are accurate, this is certainly an unexpected positive development for macroeconomic data,” said Alan Sandeep, head of research at Naeem Brokerage. “It is also a different development than the rest of the emerging economies are seeing from a steady increase in inflation.” The IMF said in a report in January it expected inflation to fall to 12 percent by June and a single digit by 2019. He warned against cutting interest rates too quickly and urged the central bank to remain cautious. Inflation surged in 2017 on the back of economic reforms linked to a $ 12 billion IMF loan program signed by Egypt in late 2016 that included significant cuts in energy subsidies and tax increases. Prices rose especially after the import-dependent country liberalized the Egyptian pound’s exchange rate in November 2016, bringing inflation to a record high of 33 percent in July 2017, but inflation has been gradually declining since then.

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