Highest Egypt Inflation in 2021 Raises Chances of Rate Hold

Egyptian urban prices accelerated at their fastest pace since December, raising the chances of the central bank retaining one of the world’s highest real interest rates next week, Bloomberg News reported. Consumer prices in urban parts of the North African nation grew an annual 4.8% in May, compared with 4.1% in April, the state-run statistics agency CAPMAS said Thursday. Prices increased 0.7% month-on-month. The acceleration, which some analysts including Goldman Sachs International didn’t predict, was driven by increases in food and beverage prices, the single largest component of the inflation basket. Those rose 1.7% on an annual basis and 1.5% on a monthly one. Inflation will likely continue to edge up until September reflecting global prices, higher costs of fresh produce in the summer season and an unfavorable base effect, according to Radwa El-Swaify, head of research at Cairo-based Pharos Holding. That means the central bank may leave interest rates unchanged until at least October, she said. Read more.