Egypt inflation on the rise

Published December 11th, 2011 - 03:44 GMT
Egypt
Egypt

Egypt’s inflation accelerated on rising food prices in November to reach an annual rate of 9.1 from 7.1 percent in October, data from an Egyptian government website showed.

Food and beverage costs, the biggest component in the consumer price index, increased at an annual rate of 11.6 percent in November, compared with 8.7 percent a month earlier.

The economy is still struggling to recover from nearly a full year of unrest and instability.  Egypt’s gross domestic product grew 1.8 percent in the fiscal year that ended June 30, the weakest performance in at least 10 years.

Last month, Egypt's central bank said that the risk of higher inflation prompted it to raise benchmark interest rates for the first time in three years, even as the economy slows. More interest rate increases are likely in 2012, according to local observers. 

Foreign reserves have plunged from US$36 billion at the end of 2010 to about $20 billion at the end of November in the wake of the uprising that unseated former President Hosni Mubarak. Subsequent political turmoil sent investors and tourists packing.  The Egyptian pound has lost 3.6% of its value against hard currencies this year.

The data showed that the urban consumer price index increased due to rising prices of commodities, such as those of butane gas cylinders, which rose at an annual rate of 38 percent. Tobacco rose by 41 percent.

In recent months, two men died in clashes stemming from butane scarcities in several governorates.

The price for a butane gas cylinder has historically hovered around LE7, but recent prices have reached LE40 in Cairo and LE55 in Minya.

As for food and beverage costs, the price of tomatoes rose at an annual rate of 84 percent and meat by a rate of 6 percent. (english.nuqudy.com)

 


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