Cairo – Mubasher: Egypt's core price index (CPI) annually jumped to 9.51% during April 2016 from 8.41% a month earlier, said the Central Bank of Egypt in a press release.
On a monthly basis, core inflation rose by 1.24% in April 2016, compared to 1.62% by the end of March 2016.
Earlier, the Central Agency for Public Mobilization and Statistics said Egypt’s consumer price index (CPI), which covers urban consumer only, rose to 10.9% during April 2016, compared with 9.2% in April 2015.
Capital Economics expected interest rates to rise further in the coming months, which will accordingly prompt the bank of Egypt to hike interest rates.
Ramy Oraby, an economist at Mubasher International, said inflation is forecast to increase over the coming period. "We still expect inflation to remain elevated due to the expected implementation of the value-added tax (VAT) in addition to more exchange rate flexibility. We also note that reducing the budget deficit to meet the previously-announced targets should help suppress further inflationary pressure over the medium term", Oraby said.
The country’s deficit amounted to EGP 191.6 billion, or 6.8% of GDP, during the first seven months of 2015/16, compared with EGP 159.1 billion, or 6.5% of GDP for the year-ago period.
Translated by Ahmed El-Sayed Ali
