Inflation in Egypt is expected to climb to 10.9 percent this year, the highest level since 2010, the International Monetary Fund said on Tuesday, more than it expected in April.
"Inflation is expected to rise in Egypt, Jordan, Morocco, and Tunisia, reflecting recent and planned subsidy cuts and, in some cases, pressure from monetization of fiscal deficits and supply shortages," the IMF said in its regional outlook.
The Fund expected Egypt's inflation of 8.2 percent in 2013 in its half-yearly analysis of the world economy published last month.
In 2014, however, price pressures may be a bit lower than previously thought as the IMF cut the country's consumer price growth prediction to 11.6 percent from 13.7 percent seen in April, the report showed.
The IMF did not change economic forecasts for other Middle East and North African oil importers and exporters in its new report, which closely follows the global outlook.
Egypt's urban consumer inflation accelerated to 8.1 percent in the year to April, fuelled by rising food and energy prices and a struggling pound currency.
It is expected to climb further as the government pushes through tax hikes and subsidy cuts to secure a $4.8 billion loan from the IMF after two years of economic and political upheaval.
Negotiations with the IMF have stumbled repeatedly over government resistance to the austerity measures needed to get the fiscal deficit under control.
The IMF expects Egypt's budget deficit to widen to 11.3 percent of gross domestic product in the fiscal year, which ends in June, from 10.7 percent in the previous year, but narrow again to 8.7 percent in the fiscal 2013/14.
Egypt's newly-appointed Investment Minister Yehya Hamed said earlier this month that the shortfall will be 11.5 percent of GDP in the 2012/13 year.