Cairo – Mubasher: Egypt's inflation is expected to surge to 29.0% in 2017 from 13.8% in 2016 and 10.4% in 2015, Capital Economics said in a new report released Thursday.

It noted that inflation was expected to drop once more to 12.5% in 2018.

Meanwhile, the gross domestic product (GDP) of the most populous Arab country is forecasted to drop to 1.0% in 2017 but to rise once more to 3.8% in 2018, compared to 3.9% in 2015 and estimated 3.0% in 2016.

In January, Egypt's consumer price index (CPI), inflation indicator, jumped to 29.6% year-on-year, according to data released by the Central Agency for Public Mobilisation and Statistics (CAPMAS).

In February, inflation surged further, hitting an all-time high of 31.7% on a yearly basis, and reached to 233.7 points compared to 227.5 points in the previous month.

In November 2016, the Central Bank of Egypt (CBE) decided to drop the Egyptian pound-US dollar peg and float the local currency against the greenback and other currencies.