CAIRO – Egyptian inflation in the year to June eased slightly on the back of lower food prices from a year earlier, supporting a hold in central bank interest rates in July to support an economy reeling from the impact of the revolt that ousted president Hosni Mubarak.
Urban consumer inflation was 11.8 percent in the 12 months to June from 11.87 percent in May, Egypt’s state statistics agency CAPMAS reported on its website Sunday. But on a monthly basis, prices increased 0.4 percent in June, as prices of food and tobacco increased from May.
Analysts expect the central bank to keep interest rates steady in July to stimulate growth, saying the government is more concerned about ending a recession than fighting inflation. Raising rates to combat food-driven inflation would have a limited or no effect on overall prices.
Food and beverage prices, which account for 44 percent of weighting of the basket Egypt uses to measure inflation, decelerated 18.98 percent in the year to June from 19.8 percent in May. – Reuters