Sat, 17 Nov 2018

Cairo - Egypt's inflation dropped to 21.9% in December, down from nearly 26% the month before, marking its lowest level since the currency was floated in November 2016, according to figures released on Wednesday.

The numbers published by the Central Bank of Egypt also showed that year-on-year core inflation declined to 19.86% in December, down from 25.54% in November. Core inflation excludes volatile commodities such as food and energy.

The inflation rate peaked over the summer after the government raised fuel prices by up to 55% and electricity prices by more than 40%. It had also doubled the price of household gas canisters. Inflation largely hovered around 30% in 2017.

Dubai-based Arqaam Capital said the decline in inflation reflects the "strong positive base effect" following the currency float, part of broader economic reforms taken to meet demands by the International Monetary Fund for a $12bn bailout loan. It expects inflation to decline to 18% in January.

The currency floatation and austerity measures, aimed at rebuilding the economy after years of unrest, have hit poor and middle class Egyptians especially hard.

President Abdel-Fattah al-Sisi, who led the 2013 military overthrow of an elected but divisive Islamist president, has urged Egyptians to be patient as the reforms take effect. In September he said the government would aim for around 13% inflation in 2018.

Al-Sisi has yet to formally announce his candidacy, but is virtually certain to run for and win a second four-year term in elections set for March. He faces no realistic challengers, and authorities have silenced virtually all public criticism of the government.

Source: News24

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