Egypt’s annual urban consumer inflation accelerated to 4.8 percent in May from 4.1 percent the previous month, official statistics agency CAPMAS said on Thursday, led by increases in food prices.
Month-on-month headline inflation in May fell to 0.7 percent, down from 0.9 percent in April. Core inflation, which strips out volatile items such as food, edged up to 3.4 percent year-on-year from 3.3 percent in April.
“The increase is in line with expectations, particularly in light of higher food and beverage prices, which ensures that prices will continue to rise in the coming period,” said Radwa El-Swaify of Pharos Securities Brokerage, singling out price increases of fruit and vegetables.
CAPMAS said fruit prices had risen 9 percent and vegetables 5.3 percent month-on-month.
The inflation numbers reflected higher delivery and logistical costs and lower supplies in the food and other sectors, said Naeem Brokerage, adding that a pick-up in inflation expected from July was expected to be subdued due to a favorable base-year effect.
Egypt’s central bank says it is targeting an inflation rate of about 7 percent plus or minus 2 percentage points by the end of 2022.
Egypt has some of the highest real interest rates in the world, which has helped attract investment in treasuries but discouraged corporate borrowing.
The central bank, which is holding its next interest rate meeting on June 17, last cut rates in November, saying inflation had stabilized. The latest headline inflation reading at the time was 4.5 percent.