Urban consumer price inflation dropped to 30.8% in October from 31.6% in September on an annual basis. EFG Hermes economist Mohamed Abu Basha explains that, “on a monthly basis, inflation was up 1.1%, largely due to i) 7% M-o-M increase in communication costs, which followed the increase of pre-paid mobile bills; and ii) 20% M-o-M increase in education prices at the start of the new school year. Excluding these two, one-off items, monthly inflation would have been largely flat, with the rest of the constituents of the consumer basket showing very minor price increases in October. Food inflation was up only 0.2% M-o-M, the lowest since January 2016… [EFG Hermes] forecasts an accelerated pace of deceleration starting November’s readings as the base effect of last year’s sharp inflationary pressures sets in; we forecast annual headline inflation at 25% in November and 22-23% in December.” Core also inflation fell to 30.53% in October from 33.26%.

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