Egypt’s inflation is expected to continue its downward trend for the fifth consecutive month in July, despite recent price increases in food, tobacco, and fuel. Analysts attribute this decline to the International Monetary Fund’s (IMF) efforts to control monetary policy, which began taking effect after a $8 billion financial support package was signed in March. The IMF’s package, while aiding in inflation control, necessitates price increases for certain goods and services.
The government recently increased prices for subsidized bread and fuel, expected to contribute to monthly inflation. However, the base-year effect, with inflation at 36.5% in July 2023, is a significant factor in the projected decline. Analysts predict annual urban consumer inflation to slow to 26.6% in July, down from 26.7% in June. Core inflation, excluding volatile items, is also expected to decrease to 26.0% from 26.7% in June.
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While inflation is expected to decrease in July, the government’s measures to control it through price increases and the IMF’s support package will likely continue to impact the economy in the coming months. Further price increases, including for metro tickets, are anticipated. The state statistics agency CAPMAS is set to release June inflation data on August 1st.