Egypt’s annual core inflation rate declined to 7.94 percent in November from 8.86 percent in October, exceeding analysts' expectations, according to a report from the Central Bank of Egypt (CBE).
The inflation doesn’t include commodities like fruits and vegetables due to sharp fluctuations in prices.
Earlier in the day, the Egyptian Central Agency for Public Mobilization and Statistics said that annual consumer price inflation in cities fell to 15.7 percent year-on-year in November, from 17.7 percent in October.
Inflation jumped to a record high in July 2017 after Egypt floated its pound currency in November 2016, but has gradually receded since then.
Egyptians, millions of whom live below the poverty line, complain of difficulties in meeting basic needs after several jumps in fuel, medicine and transportation prices.
Hiba Mohammed, a mother of four in northeast Cairo, complained that her marital problems increased because of her husband's insufficient income of 1,500 pounds (less than $85). She explained that with such salary, he is unable to meet basic household needs because of rising inflation, according to Reuters.
The Central Agency said that inflation in November fell 0.7 percent to reach 309.1 points from 311.2 points, the second decline in 2018.
The inflation rate from January to November 2018 rose 14.5 percent compared to the same period last year.
The statistics agency pointed out that the inflation rate fell 0.8 percent in urban areas in November compared to the previous month to reach 299.1 points, whereas the inflation rate on an annual basis last November was 15.7 percent compared to the same month of 2017.
The inflation rate also dropped 0.6 percent in rural areas, reaching 321 points, and the annual inflation rate was 15.5 percent compared to November 2017.
Head of research at Pharos Holding in Cairo Radwa el-Swaify announced that the decline in the inflation rate was not expected, however, it is a positive thing.
“The government increased the supply of vegetables that had created a problem in past months. This helped bring the annual rate back in line with the target,” she added.
Recently, the government raised the prices of petroleum products, subway tickets, water and electricity bills as well as a number of services provided to citizens.
In a recent memo, London-based research firm “Capital Economics” predicted inflation receding to 16 percent in November, noting that the decrease is expected to continue in the coming period which supports the Central Bank to bring down interest rates to 11.25 percent at the end of 2019.
The firm said that the rising inflation in October was caused by a sharp jump in food prices.
“Given that the rise in inflation has been almost entirely due to higher food inflation rather than a broader strengthening of price pressures, we think that the CBE will decide to keep the overnight deposit rate unchanged at 16.75 percent,” Capital Economics said.
CBE left its policy rate unchanged at its last meeting mid-November, keeping overnight deposit and lending rates on hold at 16.75 percent and 17.75 percent.
