{"id":565871,"date":"2021-05-10T13:52:07","date_gmt":"2021-05-10T13:52:07","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2021\/05\/10\/inflation-slows-unexpectedly-in-april\/"},"modified":"2021-05-10T13:52:07","modified_gmt":"2021-05-10T13:52:07","slug":"inflation-slows-unexpectedly-in-april","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2021\/05\/10\/inflation-slows-unexpectedly-in-april\/","title":{"rendered":"Inflation slows unexpectedly in April"},"content":{"rendered":"<p><a class=\"content-anchor\" id=\"tldr-story-02\"><\/a> <strong>Annual urban headline inflation slowed in April against expectations<\/strong>, shrugging off rising global commodity prices thanks to a favorable base effect that offset a rise in monthly prices. Figures released today by state statistics bureau Capmas showed urban inflation fell to 4.1% in April from <a href=\"https:\/\/enterprise.news\/egypt\/en\/news\/story\/91d91bf8-2519-46d6-a33e-b0495cc892c0\">4.5% in March<\/a>, while <a href=\"https:\/\/ent.news\/2021\/5\/202151094538_CAPMAS-04-2021.pdf\">the national rate (pdf)<\/a> dropped to 4.4% last month, down from 4.8% the month before.<\/p>\n<p><strong>This came despite inflation accelerating on a monthly basis:<\/strong> Urban prices rose 0.9% during the month, compared to 0.6% in March.<\/p>\n<p><strong>Food prices fell slightly on a yearly basis, but rose month-on-month. <\/strong>An index measuring the cost of food in urban areas fell 0.3% y-o-y but increased 2.3% from March. Other goods and services including education, health, and utilities edged up nationwide on an annual basis but remained unchanged from March.<\/p>\n<p><strong>Analysts had expected inflation to inch up: <\/strong>Beltone had expected inflation to increase to 4.7%, while Naeem Brokerage had pencilled in growth of 4.8%. Both attributed the unexpected slowdown to a favorable base effect from last year, when inflation measured <a href=\"https:\/\/enterprise.news\/egypt\/en\/news\/story\/a53e67cb-ab77-417d-a85e-d21ff4469016\">5.9%<\/a>.<\/p>\n<p><strong>A surprise<\/strong><strong>:<\/strong> \u201cSlower than anticipated demand-pull patterns\u201d likely led to more muted price growth in some food items, which contributed to the overall reading coming \u201cwell below our estimate,\u201d Naeem Brokerage said in a note this morning. The higher monthly reading reflects \u201ccost-push factors\u201d including higher raw materials, feed, and transportation and storage costs.<\/p>\n<p><strong>Is the Ramadan effect still with us? <\/strong><a href=\"https:\/\/enterprise.news\/egypt\/en\/news\/story\/91d91bf8-2519-46d6-a33e-b0495cc892c0\">March\u2019s reading<\/a> had already suggested that the customary pick up in inflation that precedes Ramadan has already taken place, but Pharos\u2019 head of research Radwa El Swaify told us that sellers may have deferred raising prices until right before the holy month began in mid-April, which justifies the higher m-o-m figure. \u201cRising prices were evident in the monthly numbers thanks to Ramdan,\u201d EFG Hermes\u2019 Mohamed Abou Basha, meanwhile, said.<\/p>\n<p><strong>Annual inflation has been mostly flat since the start of the year:<\/strong> Inflation has barely budged over the first four months of the year, with April\u2019s rate just 0.2% below <a href=\"https:\/\/enterprise.news\/egypt\/en\/news\/story\/d2132ef4-bbe3-4fbf-adbe-0033fb050730\">January\u2019s figure<\/a>. This is below the lower bound of the central bank\u2019s 7% (+\/- 2%) target range.<\/p>\n<p><strong>But what about skyrocketing global commodity prices? They may be taking more time to filter through<\/strong>, analysts tell us. The year-long rally in global food and metal commodities has found new momentum in recent weeks, pushing prices of some goods to all-time highs. While the boom doesn\u2019t seem to have yet impacted domestic prices, both El Swaify and Beltone\u2019s Alia Mamdouh expect this to change, telling us that the higher prices of raw materials will increase the cost of local production and put pressure on end prices as we head further into 2021. Tap\/click here for more on <a href=\"https:\/\/enterprise.news\/egypt\/en\/news\/story\/2fb13174-3377-49ef-8300-480e0abee206\">how rallying commodities are affecting Egypt<\/a>.<\/p>\n<p><strong>The picture will be slightly different in a few months\u2019 time, but don\u2019t expect runaway inflation:<\/strong> Beltone is pencilling in a headline rate of 6.3-6.5% by the end of the third quarter, which is still beneath the midpoint of the central bank\u2019s target, while Pharos is forecasting the figure to climb to 5% in May and June and 6% in July and August before cooling off in 4Q2021.<\/p>\n<p><strong>Could lower inflation tempt the CBE to resume its easing cycle sooner? It\u2019s unlikely.<\/strong> \u201cGiven rising food prices on a monthly basis \u2026 [and] the significant rise in international commodities prices as well as the rise in oil prices, we expect maintained interest rates in the upcoming meeting on 17 June,\u201d Mamdouh said. The latest development in terms of annual inflation supports a rate cut by 4Q2022, she added. El Swaify, meanwhile, sees the central bank leaving rates unchanged for least another five months.<\/p>\n<p><strong>The Central Bank of Egypt (CBE) left rates on hold for the fourth consecutive month<\/strong> when it met <a href=\"https:\/\/enterprise.news\/egypt\/en\/news\/story\/6c5d1ef9-6305-4119-a57e-4a6f45c6f2d5\">earlier this month<\/a> as policymakers looked to keep Egypt\u2019s carry trade the most attractive in the world \u2014 and anticipated heightened inflation.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Annual urban headline inflation slowed in April against expectations, shrugging off rising global commodity prices thanks to a favorable base effect that offset a rise in monthly prices. Figures released today by state statistics bureau Capmas showed urban inflation fell to 4.1% in April from 4.5% in March, while the national rate (pdf) dropped to [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"single-feature.php","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[10034],"tags":[104,633,182,724],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-565871","post","type-post","status-publish","format-standard","hentry","category-speed-round-economy","tag-economy","tag-enterprisepm","tag-inflation","tag-monetary-policy","wpautop","entry"],"acf":{"mongo_id":"0d82773c-16b8-4e19-956b-28cf55f425a6","is_powered_by":true,"story_type":"1","photo_url":"","photo_position":"above","related_issue":[565865],"teaser":"","voice_url":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.1 (Yoast SEO v27.1.1) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Inflation slows unexpectedly in April - EnterpriseAM Egypt<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterpriseam.com\/egypt\/2021\/05\/10\/inflation-slows-unexpectedly-in-april\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Inflation slows unexpectedly in April\" \/>\n<meta property=\"og:description\" content=\"Annual urban headline inflation slowed in April against expectations, shrugging off rising global commodity prices thanks to a favorable base effect that offset a rise in monthly prices. Figures released today by state statistics bureau Capmas showed urban inflation fell to 4.1% in April from 4.5% in March, while the national rate (pdf) dropped to [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterpriseam.com\/egypt\/2021\/05\/10\/inflation-slows-unexpectedly-in-april\/\" \/>\n<meta property=\"og:site_name\" content=\"EnterpriseAM Egypt\" \/>\n<meta property=\"article:published_time\" content=\"2021-05-10T13:52:07+00:00\" \/>\n<meta name=\"author\" content=\"enterpriseam admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"enterpriseam admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/enterpriseam.com\/egypt\/2021\/05\/10\/inflation-slows-unexpectedly-in-april\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/enterpriseam.com\/egypt\/2021\/05\/10\/inflation-slows-unexpectedly-in-april\/\"},\"author\":{\"name\":\"enterpriseam admin\",\"@id\":\"https:\/\/enterpriseam.com\/egypt\/#\/schema\/person\/ca597032db7e4db868359c123cec256d\"},\"headline\":\"Inflation slows unexpectedly in April\",\"datePublished\":\"2021-05-10T13:52:07+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/enterpriseam.com\/egypt\/2021\/05\/10\/inflation-slows-unexpectedly-in-april\/\"},\"wordCount\":645,\"publisher\":{\"@id\":\"https:\/\/enterpriseam.com\/egypt\/#organization\"},\"keywords\":[\"economy\",\"EnterprisePM\",\"inflation\",\"monetary policy\"],\"articleSection\":[\"SPEED ROUND: ECONOMY\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/enterpriseam.com\/egypt\/2021\/05\/10\/inflation-slows-unexpectedly-in-april\/\",\"url\":\"https:\/\/enterpriseam.com\/egypt\/2021\/05\/10\/inflation-slows-unexpectedly-in-april\/\",\"name\":\"Inflation slows unexpectedly in April - 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On a monthly basis, consumer prices fell for the first time in 11 months, dipping 0.1% due\u2026","rel":"","context":"In &quot;Economy&quot;","block_context":{"text":"Economy","link":"https:\/\/enterpriseam.com\/egypt\/category\/economy\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2022\/1\/118.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":566708,"url":"https:\/\/enterpriseam.com\/egypt\/2021\/07\/08\/monthly-prices-in-urban-egypt-hold-steady-keeping-inflation-in-check\/","url_meta":{"origin":565871,"position":1},"title":"Monthly prices in urban Egypt hold steady, keeping inflation in check","author":"enterpriseam admin","date":"8 July 2021","format":false,"excerpt":"Annual urban inflation inched up slightly in June, at a pace slower than everyone had expected, thanks to a favorable base effect and a slowdown in the growth of monthly food prices. Figures released today by state statistics bureau Capmas showed the headline rate accelerated to 4.9% at the end\u2026","rel":"","context":"In &quot;SPEED ROUND: ECONOMY&quot;","block_context":{"text":"SPEED ROUND: ECONOMY","link":"https:\/\/enterpriseam.com\/egypt\/category\/speed-round-economy\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2021\/7\/362.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":553861,"url":"https:\/\/enterpriseam.com\/egypt\/2021\/12\/12\/urban-inflation-dips-to-lowest-level-since-july\/","url_meta":{"origin":565871,"position":2},"title":"Urban inflation dips to lowest level since July","author":"enterpriseam admin","date":"12 December 2021","format":false,"excerpt":"Annual urban inflation slowed for the second month running in November as pressure on food prices continued to ease, according to official figures released on Thursday. The headline rate fell to 5.6% last month from 6.3% in October, the lowest rate since July and within the lower end of the\u2026","rel":"","context":"In &quot;Economy&quot;","block_context":{"text":"Economy","link":"https:\/\/enterpriseam.com\/egypt\/category\/economy\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2021\/12\/291.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":557230,"url":"https:\/\/enterpriseam.com\/egypt\/2021\/09\/12\/inflation-continues-upwards-trend-in-august-hitting-5-7\/","url_meta":{"origin":565871,"position":3},"title":"Inflation continues upwards trend in August, hitting 5.7%","author":"enterpriseam admin","date":"12 September 2021","format":false,"excerpt":"Annual urban inflation hit its highest level in nine months in August on the back of rising food, fuel and transportation costs, according to figures released on Thursday. 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