Egypt’s Heady Inflation Drops

Egypt’s annual inflation rates dropped in December to their lowest levels since the country floated its pound currency in November 2016, sending prices shooting up, CNBC reported. Urban consumer price inflation eased to 21.9% in December year-on-year from 26% in November, with its month-on-month rate falling to -0.2%, the first time prices decreased since Dec 2015, according to official data. Core inflation, which strips out volatile items such as food, fell to 19.86% in December from 25.53% the previous month. “The drop is positive and supports our expectations of lower inflation ahead, towards our 18% forecast in the first quarter of 2018,” said Hany Farahat, senior economist at CI Capital. Inflation reached a record high of 35% in July after energy subsidies were cut in line with reforms agreed with the International Monetary Fund for a $12 billion loan, but has gradually eased since then. Egypt’s finance minister said on Wednesday he expected the rate to fall below 20% next month and to 10-12% during 2018 before falling below 10% in 2019.