Cairo - Mubasher: MubasherTrade Research has reiterated its expectations for inflation in Egypt, averaging about 34.6% during the first quarter of fiscal year 2017-2018, ending 30 September 2017, before easing afterwards to less than 15% by Q4/FY17-18, ending 30 June 2018.

“We stick to our view that rate hikes have very little to offer to contain supply-side inflation,” the research firm said in a recent report.

The most recent data of the Central Agency for Public Mobilization and Statistics (CAPMAS) showed a surge in the inflation rate in Egypt by 34.2% year-on-year in July 2017.

The annual inflation rate went up by 31.94% in June 2017, versus 30.57% in May 2017.

Data showed that the prices of food and beverages, meat and poultry, and vegetables jumped 43%, 45.4%, and 34.4%, respectively.

On a monthly basis, the consumer price index (CPI) rose notably by 3.3% in July 2017 due to the increase in petroleum materials prices.

“Fiscal consolidation measures have fueled inflation again after it had witnessed an easing rate of increase.

“A hiking monthly inflation is alarming as it indicates how aggressive the inflationary wave could be,” the report indicated.

MubasherTrade also noted that the effect of the fiscal measures is not surprising, with the main concern here is the efficacy of recent successive interest rate hikes that were then justified by mitigating the expected inflationary pressures.