Egypt’s annual urban consumer price inflation quickened to 7.3 percent year-on-year in January, its highest since August 2019, from 5.9 percent in December, data from the country’s statistics agency CAPMAS showed on Thursday.
Prices climbed 0.9 percent month-on-month compared to a 0.08 percent drop in December, the agency said.
The annual rate puts inflation near the higher end of the 5-9 percent target range set by the central bank, which kept its key interest rates unchanged during a regular monetary policy committee meeting on Februray 3.
The headline inflation number reflected “unfavorable base effects and rising food prices,” EFG Hermes’s Mohamed Abu Basha said in a note. “Monthly inflation trends showed food inflation jumped 2.1 percent, reflecting a broad increase in most food items.”
Inflation dynamics nonetheless remain weak in the absence of demand pressures, he wrote.
“We therefore expect the acceleration in the headline number not to push the Central Bank of Egypt (CBE) to hike rates in the near term, though we are clearly seeing rising risks,” Abu Basha said.
Core inflation, which strips out volatile items such as food, increased to 6.3 percent year on year in January from 6 percent in December, the central bank said on Thursday.
Egypt’s economy has bounced back since the worst of the coronavirus pandemic. Gross domestic product shot up by 9.8 percent year-on-year in the July-September quarter, up from 0.7 percent a year earlier, planning ministry data showed.