CAIRO (Reuters) -Egyptian annual urban consumer inflation in December rose to 21.3%, the highest since the end of 2017, exceeding analyst expectations, data from the statistics agency CAPMAS showed on Tuesday.
The rise from 18.7% in November followed a currency devaluation in October and restrictions on imports. It is likely to increase pressure on the central bank’s Monetary Policy Committee to raise interest rates when it next meets on Feb. 2.
The median forecast in a Reuters poll of 15 economists had projected inflation of 20.50%. Five economists also forecast that core inflation would reach a median 23.6%, from 21.5% in November.
However, annual core inflation, which strips out volatile items such as food, rose to 24.4% in December, the central bank said.
“Food and beverages were up 4.6% month-on-month (adding to the 4.5% in November), impacted mainly by bread and cereals, dairy, vegetables and meat,” Allen Sandeep of Naeem Brokerage said.
This goes towards absorbing a 25% devaluation by the central bank in late October but heralds more inflation to come, Sandeep said.
“Now combined monthly inflation has risen by around 7% over three months. This is close to a 30% pass through to the urban CPI index. With the new round of devaluation ongoing, which we expect to be roughly 15%, we can expect annual CPI to touch 25% by February,” he said.
(Reporting by Nadine Awadalla and Patrick Werr; Editing by Jacqueline Wong, Jon Boyle and Barbara Lewis)
