Finance minister expects inflation rate below 20% next month

CAIRO- 10 January 2018: Egypt’s inflation is expected to fall below 20 percent next month and to 10 to 12 percent during 2018, Finance Minister Amr El Garhy said on Wednesday.

Annual urban consumer price inflation fell to 21.9 percent in December from 26 percent in November, the official statistics agency, CAPMAS, said earlier on Wednesday.

“It’s a better than good indication and puts us on a good path,” said Garhy. He expected the rate to fall below 10 percent in 2019.

Inflation has climbed since Egypt floated its currency, the pound, in November 2016, reaching a record high of 35 percent in July after energy subsidies were cut. It has gradually eased since July.

Egypt’s central bank has raised key interest rates by 700 basis points since November 2016 in an attempt to ease soaring inflation.

Economists expect it to start cutting the rates in coming months as inflationary pressure ease. The central bank’s next monetary policy meeting is on Feb. 15.