Inflation eases in June

Despite fears of Ramadan price hikes, montlhy headline consumer price inflation declined by 0.7 percent in June, according to calculations by Egypt’s Central Bank. This brought the annual rate down to 11.39 percent in June, compared to 13.11 percent in May.

The decline was partly supported by base effects from last year: June of 2014 saw an 0.84 percent monthly increase in headline CPI.

Lower prices for fresh vegetables also played a major role. The cost of fresh vegetables — a major driver of inflation earlier in the year — declined by 12.48 percent during the month. This was partially offset by higher pries for fresh fruit, poultry and eggs.

An overall decline in food prices is good news for Egyptians, especially poor families, for whom food can make up more than half of their monthly outgoings.

Meanwhile, core CPI — which excludes volatile goods like fresh produce as well as government-regulated items like electricity and butane gas — increased by 0.61 percent in June, to reach an annual rate of 8.07 percent.

Although inflation appears to have eased after spiking to a six-year high in May, the rising cost of living has been a persistent problem in Egypt. Inflation soared after fuel subsidies were cut last summer, and maintained an average monthly pace of 1.14 percent during the first five months of 2015.