Annual inflation drops in August, monthly rate rises

Annual headline consumer price inflation eased to 7.88 percent in August, the first time since March 2013 that the rate has fallen below 8 percent.

Last month, the annual rate was 8.38 percent.

The Central Bank attributes the decline to favorable base effects from last year.

In the summer of 2014, Egypt slashed fuel subsidies, pushing annual inflation up to 11.4 percent in July 2014 and 11.49 percent in August 2014.

Now that a year has passed since that subsidy-cut price bump, the rate of year-on-year inflation has slowed in both July and August, even as consumer prices continue to rise.

The decline in the annual inflation rate in August came despite an overall increase in prices during the month. Monthly headline CPI recorded a 0.63 percent increase, slowing slightly compared to a 0.71 percent increase in July.

State-statistics agency CAPMAS attributes the monthly increase to rising prices for commodities and services including fruits and vegetables, housing, household appliances and repairs, hotels and restaurants.