Inflation slowing down

The Annual inflation rate in urban areas of Egypt, the main inflation indicator, edged down to 10.4 per cent in July compared to 11.8 per cent in June.

While most of the components of the index that measures increase in consumer prices declined, the effect of the fall in food prices, being the largest component, had the biggest impact on the overall slowdown. Food price inflation dropped to 16.6 per cent in July from 19 per cent in June 2011.

However, on a monthly level, the urban inflation increased to 1.2 per cent in July 2011 after slowing down to 0.4 per cent in June 2011 due to increase in prices of food and beverages along with hotels and restaurants which had their first increase since the 25 January uprising on the back of increased demand in the summer holiday months.


With the slowdown in inflation and prospects of Egypt's speedy economic recovery unlikely, and on the back of the new developments in the global economy, Beltone Financial ruled out that the Central Bank of Egypt (CBE) would increase interest rates in its upcoming meeting on 25 August, keeping key policy rates unchanged at their current levels of 9.75 per cent and 8.25 per cent for the overnight lending and deposit rates respectively.