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Fuel subsidy cuts to raise Egypt's inflation

Fuel subsidy cuts to raise Egypt's inflation
Annual inflation fell to 12.9% in April 2018

Cairo – Mubasher: Egypt’s inflation is expected to rise in the coming period as the government plans to slash fuel subsidy next July, Bloomberg News has said.

This reduction will take its toll on the Central Bank of Egypt’s (CBE) measures to lower annual urban inflation which surged to 33% after November 2016 currency float decision.

Higher oil prices will drive the central bank to proceed with “caution as it unwinds high borrowing costs”, Bilal Khan, a senior economist at Standard Chartered Bank told Bloomberg. Moreover, the “recent rise in US yields could complicate the timing of cuts further,” he added.

Annual urban inflation fell to 12.9% in April 2018, compared to 32.9% in the same month a year earlier, Central Agency for Public Mobilization and Statistics’ (CAPMAS) data revealed.

In the same vein, Egypt’s core inflation remained stable at 11.6% in April, according to the CBE’s data.