Annual inflation drops to 22% in Dec, lowest rate since flotation

CAIRO – 10 January 2018: Egypt’s annual inflation dropped in December to 22.3 percent, compared to 26.7 percent in November, the official statistics agency announced Wednesday.

This is the lowest annual inflation rate since the flotation of the Egyptian pound in November 2016, according to the Central Agency for Mobilization and Statistics (CAPMAS).

Inflation soared to a record high in July on the back of fuel and energy subsidy cuts by the government.

Economic analysts expected inflation to continue dropping in the coming months to allow the Central Bank of Egypt (CBE) to consider cutting interest rates

In its first review published in late September, the International Monetary Fund (IMF) flagged high inflation and fiscal pressures from energy subsidies as main challenges facing the Egyptian government.

Decreasing inflation over the previous months has pushed the CBE kept its interest rates unchanged for three consecutive times, setting the overnight deposit rate and the overnight lending rate at 18.75 percent and19.75 percent, respectively.

The CBE had increased interest rates by a total of seven percent since the flotation of the Egyptian pound in November 2016 in a bid to curb inflation.