Egypt’s headline inflation rises slightly at 4.9% in June

Egypt’s annual urban consumer inflation rose to 4.9 percent in June from 4.8 percent in May, official statistics agency CAPMAS data showed on Thursday. The figure is slower pace of increase than expected.

Month-on-month inflation slowed to 0.2 percent in June from 0.7 percent in May, the agency added.

A slowdown in monthly inflation of food items was behind the latest figures, Allen Sandeep – director of research at Naeem Brokerage – told Reuters.

However, Sandeep expected that inflation could pick up in July and August after an average 15 percent rise in power prices starting from this month and the likelihood of a fuel price surge.

Central Bank of Egypt (CBE) has set an inflation rate target of 7 percent, plus or minus 2 percentage points.

“The numbers are lower than expected and also lower than the central bank’s target, especially in light of the rise in global commodity prices,” Radwa El-Swaify – head of research at Pharos Securities Brokerage – told Reuters.

The last cut in interest rates by the central bank took place in November. The CBE will hold its next interest rate meeting on August 5.