Egypt’s annual inflation falls to 6.3% in Oct from 6.6% in Sept

A general view of houses, resident towers, banks and hotels in Cairo
FILE PHOTO: A general view of houses, resident towers, banks and hotels in Cairo, Egypt, November 9, 2020. REUTERS/Amr Abdallah Dalsh

November 10, 2021

CAIRO (Reuters) -Egypt’s annual urban consumer price inflation slipped to 6.3% in October from September’s 20-month high of 6.6% but the month-on-month CPI figure rose to 1.5% from 1.1%, statistics agency CAPMAS said on Wednesday.

Core inflation meanwhile increased to 5.2% year-on-year last month from 4.8% in September, central bank data showed.

Allen Sandeep of Naeem Brokerage said the monthly increase was driven by a hike in education fees of 12.7% and a 1% rise in the food index, which makes up 32.7% of the inflation index.

“The inflation reading for October, in our view, is also reflective of the worldwide supply chain distortions, which were obvious on meat, fish, milk, cheese and eggs,” Sandeep wrote.

Red meat and poultry prices jumped by 4.6%, milk, cheese and eggs by 2.9%, and fish and seafood by 1.3%, he added.

Non-food inflation dropped to an annual 3.7% in October, its slowest in more than a decade, from 4.6% in September, Capital Economics said in a research note, although it warned that higher energy prices could push inflation higher again.

“The surge in global energy prices forced the government to hike industrial gas prices by as much as 28% last week,” the note said.

“These prices are unlikely to feed through to consumers immediately, but if firms cannot absorb them into profit margins, they may be forced to pass on extra costs up the production chain.”

(Reporting by Nadine Awadalla, Alaa Swilam and Lilian Wagdy; Writing by Patrick Werr; Editing by Toby Chopra and Catherine Evans)