Egypt’s April Inflation Accelerates as Food Prices Increase
Egyptian inflation accelerated in April on rising food prices, one of the causes of the unrest that toppled President Hosni Mubarak.
The inflation rate in urban parts of Egypt, the gauge that the central bank monitors, rose to 12.1 percent from 11.5 percent in March, the Central Agency for Public Mobilization and Statistics said on its website today. Prices increased 1.2 percent in the month, it said.
The central bank will probably disregard higher prices and “keep interest rates on hold in its next meeting in an effort to support investment,” Alia Mamdouh, an economist at Cairo- based investment bank CI Capital, said by e-mail before the figures were published. She had forecast the inflation rate at 11.9 percent.
Eighteen days of protests in Egypt, sparked by falling living standards and high unemployment as well as a lack of democratic rights, led to the ouster of Mubarak on Feb. 11. The political turmoil may slow economic growth to 1 percent this year, the International Monetary Fund said last month.
Core inflation, which excludes the prices of fruits and vegetables as well as regulated prices, rose to an annual rate of 8.76 percent in April from 8.54 percent in the previous month, the central bank said in a statement on its website.
The prices of food and beverages, the biggest component in the consumer price index, rose 21.7 percent this year, according to data on the statistics agency website.
As protests continue, tourists have stayed away and factory output has been hit by strikes. Egypt’s net international reserves fell for a fourth month in April to $28 billion from $30.1 billion in March, the lowest level since April 2007.
The central bank on April 28 left its overnight deposit rate unchanged at 8.25 percent, the lowest level in more than four years, and the overnight lending rate at 9.75 percent to support economic growth. The Monetary Policy Committee last raised the benchmark interest rate in September 2008.
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