Inflation drops to lowest rate since last year’s fuel price hike

The annual headline inflation dropped to 8.38 percent in July, after recording 11.39 percent in June. The rate is the lowest since June 2014, when inflation stood at 8.20 percent, and indicates that the annual inflation rate is stabilizing after the bump caused by fuel price increases in July 2014.

The deceleration came despite a 0.71 percent increase in the monthly rate, and is largely due to favorable base effects, according to the Central Bank of Egypt.

The government slashed fuel subsidies in July 2014, sending inflation up to 11.4 percent that month and keeping the annual rate elevated throughout the year.

The July 2015 annual rate is calculated relative to inflation in July 2014 — post-fuel price increase — making the annual rate relatively low.

Core inflation — which excludes subsidized goods and services, as well as items like fresh produce that see frequent price changes — also saw a year-for-year decline, falling to 6.49 percent in July after reaching 8.07 in June. The monthly rate accelerated by 0.3 percent, easing off from 0.61 percent in June.