Egyptian Inflation Slowed to 8.5% in August as Food-Price Increases Eased

Egypt’s inflation rate declined in August as food prices, one of the causes of the unrest that toppled President Hosni Mubarak, rose at a slower pace.

The annual inflation rate in urban parts of Egypt, the gauge that the central bank monitors, fell to 8.5 percent from 10.4 percent in July, according to data posted on the website of the Central Agency for Public Mobilization and Statistics today.

Food and beverage costs, the biggest component in the consumer price index, increased an annual 12.2 percent, from 16.7 percent a month earlier. In the month, consumer prices rose 1.1 percent.

“Food prices are continuing to decelerate because we don’t have the same problems with poultry and meat that we had last year,” Mohamed Abu Basha, an economist at Cairo-based investment bank EFG-Hermes Holding SAE, said by telephone. “The central bank is likely to maintain the interest rates because the economy is still weak.”

Eighteen days of protests, sparked by falling living standards, high unemployment and a lack of democratic rights, led to Mubarak’s ouster on Feb. 11.

Egypt’s economy grew 1.8 percent in the fiscal year that ended June 30, its weakest performance in at least 10 years, Fayza Aboulnaga, minister of planning and international cooperation, told reporters on Sept. 8. The economy contracted 4.2 percent from January to March amid the worst political crisis to hit the country in three decades as revenue from industries such as tourism plummeted and consumption declined.