Inflation to reach single digit rates in 2019: CBE

CAIRO – 15 March 2018: The Central Bank of Egypt (CBE) said Thursday that it is targeting an inflation rate of 13 percent, ±3 percent in the fourth quarter of 2018, and to gradually reach a single digit rate in next year.

The Central Agency for Public Mobilization and Statistics (CAPMAS) said earlier this month that Egypt’s annual consumer price inflation dropped to 14.3 percent in February 2018, compared to 31.7 percent in the same month of 2017 that rose due to the flotation of the Egyptian Currency.

On a monthly basis, inflation increased 0.3 percent in February to record 267 points, compared to 266.3 points in January, CAPMAS added.

CAPMAS attributed the increase of inflation on a monthly basis to the rise of some commodities' prices as cereals and bread by 2.9 percent, meat and poultry by 1 percent, fish and seafood by 1.9 percent, dairy, cheese and eggs by 0.2 percent and fruits by 1.5 percent.

In January 2018, Egypt’s annual inflation declined to 17 percent, and on a monthly basis, it decreased 0.2 percent to 266.3 points.

Inflation has increased in Egypt since the floatation of the Egyptian pound in November 2016, reaching a high record level in July due to energy subsidy cuts and has gradually eased since July.

The Egyptian government expected inflation to decline by the end of this fiscal year (FY) from 17 percent to 13 percent, according to Minister of Finance Amr el-Garhy.

International financial and research organizations predicted that the inflation will continue its downtrend till the end of this fiscal year; Fitch Rating expected that inflation in Egypt will fall further this year but will remain in double digits, averaging around 13 percent, assuming that further subsidy reform in July will lead to energy price increases, given the increase in oil prices.

The IMF said in a report earlier that it expected inflation to fall to 12 percent by June and to single digits by 2019.