Egypt’s annual inflation rose to 10.7% in February from 9.7% registered in January, the Central Agency for Public Mobilization and Statistics (CAPMAS) announced Tuesday.
On 15 January, the Central Bank of Egypt (CBE) cut interest rates by 50 basis points, in its first meeting in 2015. The cut was attributed to a decline in the headline consumer price index (CPI) by 1.53% in November and 0.07% in December. The CBE said this was to bring annual inflation rates to 9.09% in November, and then to 10.13% in December.
“Upside risks from imported inflation continue to be contained on the back of lower oil prices and the consequent revision in international food price forecasts,” the CBE added.
The CBE also said that real GDP increased in Q1 FY 2014/15 to 6.8%, the highest annual growth rate since the fourth quarter of fiscal year 2007/08, thanks to growth in the manufacturing sector. There was also expansion in tourism activities, after several quarters of contraction.
In July, inflation rates witnessed their highest surge since 2008, affected by the government’s decision to reduce spending on energy subsidies. There was also an increase in the prices of fuel and gas products in an attempt to reduce the 14% GDP budget deficit, according to CAPMAS.