Egypt consumer inflation jumps to 10.6% in July

Egyptians wait in line to purchase government subsidised bread in front of a bakery in Cairo. Egypt’s economy has been in turmoil since a popular uprising ousted autocrat Hosni Mubarak in 2011, deterring tourists and foreign investors and straining the country’s finances and foreign reserves.

Reuters

Cairo

Egypt’s annual urban consumer inflation jumped to 10.6% in July from 8.2% in June, the official statistics agency CAPMAS said yesterday, after the government introduced a fuel price increase last month.

Egypt’s economy has been in turmoil since a popular uprising ousted autocrat Hosni Mubarak in 2011, deterring tourists and foreign investors and straining the country’s finances and foreign reserves.

Annual core inflation, which strips out subsidised goods and volatile items such as fruit and vegetables, rose to 9.35% in July from 8.76% in June, the central bank said in a statement later on Sunday. Annual inflation reached its highest rate in nearly four years in November but has been falling back since then. Analysts expect it to rise again after the government raised energy prices by up to 78% in an effort to ease its budget deficit.

Gas subsidies were also cut, lifting prices by 30% to 75%, and sales taxes on alcohol and cigarettes rose as well in July.

CAPMAS head Abu Bakr al-Gindy said last month he expected inflation to rise in July due to the price increases but that the effect would plateau after July.

Despite billions of dollars in aid from Gulf states and two stimulus packages, economic recovery in the most populous Arab nation has been slow.