Egyptian urban inflation falls to 9pc
Cairo, September 9, 2009
Urban consumer inflation in Egypt fell to 9.0 percent in the year to August, down from 9.9 percent in the year to July, figures from Egypt's state-run Capmas statistics agency showed on Wednesday.
Food prices continued to rise on a month-on-month basis, gaining 3.1 percent versus July, while most other categories were stable.
The index for urban inflation, the most closely watched indicator of prices, was 138.7 in August compared to 136.6 percent in July and 127.2 in August 2008.
The index figure provided by Capmas in July indicated an inflation rate of 9.98 percent in that month but was given as 9.9 percent, without explanation for the rounding discrepancy.
Simon Kitchen, a senior economist at EFG-Hermes, said the figure was much higher than his forecast of around 7.5 percent but would still leave the central bank with room to manoeuvre on interest rates.
'I would still expect the central bank to cut rates when it meets next week,' he said. 'But there is a limit to how long they can keep cutting as food prices keep rising. Food prices are up, year-to-date 19 percent, which is stunning,' he added. - Reuters