{"id":593854,"date":"2019-10-13T04:01:56","date_gmt":"2019-10-13T04:01:56","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2019\/10\/13\/egypts-annual-headline-inflation-falls-again-in-september-clearing-the-way-for-more-cuts\/"},"modified":"2019-10-13T04:01:56","modified_gmt":"2019-10-13T04:01:56","slug":"egypts-annual-headline-inflation-falls-again-in-september-clearing-the-way-for-more-cuts","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2019\/10\/13\/egypts-annual-headline-inflation-falls-again-in-september-clearing-the-way-for-more-cuts\/","title":{"rendered":"Egypt\u2019s annual headline inflation falls again in September, clearing the way for more cuts"},"content":{"rendered":"<p><a class=\"content-anchor\" id=\"tldr-story-01\"><\/a><b> Headline inflation falls again in September, clearing the way for more rate cuts:<\/b> Egypt\u2019s annual headline inflation rate dropped for the fourth consecutive month to 4.3% in September from <a href=\"https:\/\/enterprise.press\/stories\/2019\/09\/11\/egypts-headline-inflation-falls-to-six-and-a-half-year-lows-in-august\/\">7.5% in August<\/a>, its lowest recording in nearly seven years, <a href=\"http:\/\/www.capmas.gov.eg\/Pages\/ShowHmeNewsPDF.aspx?page_id=\/Admin\/News\/PressRelease\/201910108488_%D8%A7%D9%84%D8%A8%D9%8A%D8%A7%D9%86%20%D8%A7%D9%84%D8%B5%D8%AD%D9%81%D9%8A%209-2019.pdf&Type=News\">according to Capmas data (pdf)<\/a> released on Thursday. Annual urban inflation decelerated to 4.8% \u2014 the lowest it\u2019s been since November 2012 \u2014 according to <a href=\"https:\/\/ent.news\/2019\/10\/894.pdf\">central bank data (pdf)<\/a>. Annual core inflation almost halved to 2.6% in September from 4.9% in August. Monthly core prices fell 2.3% compared to -0.4%. <a href=\"https:\/\/www.reuters.com\/article\/us-egypt-economy-inflation\/egypts-annual-urban-consumer-inflation-falls-to-4-8-in-sept-as-reforms-bite-idUSKBN1WP0R3\">Reuters<\/a> and <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2019-10-10\/egypt-s-annual-inflation-eases-to-lowest-in-almost-seven-years\">Bloomberg<\/a> also have the story.<\/p>\n<p><b>Headline vs. core:<\/b> Headline inflation accounts for a basket of goods and services in an economy while core inflation removes volatile products such as food and fuel.<\/p>\n<p><b>Food and beverage price inflation plunges:<\/b> The slowdown was driven primarily by food and beverage prices, which grew just 0.3% y-o-y. \u201cThis is a key success factor in controlling inflation and reaching low levels,\u201d Radwa El Swaify, head of research at Pharos, <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2019-10-10\/egypt-s-annual-inflation-eases-to-lowest-in-almost-seven-years\">told Bloomberg<\/a>. \u201cThe government focused efforts this year on the supply of food in the market to control any volatility in its price, and that is why inflation has continued to be lower than expectations for several months.\u201d<\/p>\n<p><b>Adjusting the base year:<\/b> The CBE and Capmas calculated last month\u2019s inflation figures according to an adjusted base period, with the base year now set at September 2018 instead of January 2010. It also used new weights taken from the Household Income, Expenditure and Consumption Survey (HIECS) 2017\/2018 to better reflect consumption patterns. Weightings for food and beverages, clothing and footwear and communications were all reduced, while the remaining nine categories were increased.<\/p>\n<p><b>The base effect remains a key factor in explaining the lower inflation readings<\/b>, alongside the strength of the EGP and \u201cmore cautious spending behavior,\u201d Beltone Financial said in a research note. Food and beverages, which is usually a prime source of inflationary pressure, showed negative growth for the first time at -0.6%, compared to 6.1% in August.<\/p>\n<p><b>The surprisingly low inflation reading <\/b><a href=\"https:\/\/af.reuters.com\/article\/egyptNews\/idAFL3N26V3BU\"><b>pushed up the stock market<\/b><\/a>, with the benchmark EGX30 index rallying to close at 0.8% on Thursday, driven by index heavyweight CIB rising 0.3% and Cairo for Investment and Real Estate Development (CIRA) rising 3.9%.<\/p>\n<p><b>Successive months of plummeting inflation all but ensures more monetary easing ahead.<\/b> The fast-paced deceleration makes it likely that the CBE will move to cut rates again when it next meets on 14 November, albeit at a slower pace of 50 bps, Eskaros said. Beltone also predicts \u201cbenign\u201d inflation readings until the end of the year, giving the CBE room to push on with its aggressive easing cycle. The investment firm anticipates a 50-100 bps cut during the November meeting. EFG Hermes\u2019 Mohamed Abu Basha, meanwhile, suggests that inflation could pick back up again towards 8-9%. Despite this, he expects a 100 bps cut next month.<\/p>\n<p class=\"web-image\"><a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2019-10-10\/egypt-s-annual-inflation-eases-to-lowest-in-almost-seven-years\"><img data-recalc-dims=\"1\" decoding=\"async\" src=\"https:\/\/i0.wp.com\/ent.news\/2019\/10\/2617.jpg?ssl=1\"><\/a><\/p>\n<p><b>Real interest rates among the best in the world:<\/b> The latest figures mean that Egypt\u2019s inflation-adjusted interest rates have now risen to 8.5% \u2014 despite the CBE cutting interest rates by 250 bps over the past two months. Real interest rates have now overtaken Turkey and Ukraine to become among the highest in the world, Bloomberg says. The EGP saw its biggest rally since the middle of September after the inflation figures were released, making it the world\u2019s second best performing currency against the USD after Ukraine\u2019s hryvnia. That said, EFG\u2019s Abu Basha warns that inflation may accelerate over the next few months, putting pressure on real rates.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Headline inflation falls again in September, clearing the way for more rate cuts: Egypt\u2019s annual headline inflation rate dropped for the fourth consecutive month to 4.3% in September from 7.5% in August, its lowest recording in nearly seven years, according to Capmas data (pdf) released on Thursday. Annual urban inflation decelerated to 4.8% \u2014 the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":593855,"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":[8572],"tags":[813,812,330,2082,271,9173,84,72,182,349,2380],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-593854","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-speed-round","tag-al-ahly-pharos","tag-beltone-financial","tag-capmas","tag-carry-trade","tag-central-bank-of-egypt","tag-economics","tag-efg-hermes","tag-enterpriseam","tag-inflation","tag-interest-rates","tag-speed-round","wpautop","entry"],"acf":{"mongo_id":"582c557b-306c-435e-8778-90f2013a7247","is_powered_by":true,"story_type":"1","photo_url":"https:\/\/ent.news\/2019\/10\/2304.jpg","photo_position":"above","related_issue":[593849],"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>Egypt\u2019s annual headline inflation falls again in September, clearing the way for more cuts - 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\/2019\/10\/13\/egypts-annual-headline-inflation-falls-again-in-september-clearing-the-way-for-more-cuts\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Egypt\u2019s annual headline inflation falls again in September, clearing the way for more cuts\" \/>\n<meta property=\"og:description\" content=\"Headline inflation falls again in September, clearing the way for more rate cuts: Egypt\u2019s annual headline inflation rate dropped for the fourth consecutive month to 4.3% in September from 7.5% in August, its lowest recording in nearly seven years, according to Capmas data (pdf) released on Thursday. 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Data shows that month-on-month inflation fell to 0.5% last month from 0.8% in March, while\u2026","rel":"","context":"In &quot;Speed Round&quot;","block_context":{"text":"Speed Round","link":"https:\/\/enterpriseam.com\/egypt\/category\/speed-round\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2019\/5\/3313.png?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":592872,"url":"https:\/\/enterpriseam.com\/egypt\/2019\/11\/11\/egypts-annual-headline-inflation-cools-again-in-october\/","url_meta":{"origin":593854,"position":1},"title":"Egypt\u2019s annual headline inflation cools again in October","author":"enterpriseam admin","date":"11 November 2019","format":false,"excerpt":"Headline inflation cools again in October, ramping up expectations of a rate cut this week: Egypt\u2019s annual headline inflation rate dropped for the fifth consecutive month to its lowest level in nine years, hitting 2.4% in October from 4.3% in September, according to Capmas data (pdf) released yesterday. Annual urban\u2026","rel":"","context":"In &quot;Speed Round&quot;","block_context":{"text":"Speed Round","link":"https:\/\/enterpriseam.com\/egypt\/category\/speed-round\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2019\/11\/2438.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":575276,"url":"https:\/\/enterpriseam.com\/egypt\/2020\/10\/11\/egypt-inflation-edges-up-slightly-in-september-but-is-still-near-record-low\/","url_meta":{"origin":593854,"position":2},"title":"Egypt: Inflation edges up slightly in September but is still near record low","author":"enterpriseam admin","date":"11 October 2020","format":false,"excerpt":"Inflation edges up slightly in September \u2014 but is still near record low: Egypt\u2019s annual urban inflation accelerated to 3.7% in September, up marginally from 3.4% in August \u2014 the lowest level since 2005, according to calculations made from state statistics agency Capmas figures (pdf). Inflation has continued to ease\u2026","rel":"","context":"In &quot;Speed Round&quot;","block_context":{"text":"Speed Round","link":"https:\/\/enterpriseam.com\/egypt\/category\/speed-round\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2020\/10\/88.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":575329,"url":"https:\/\/enterpriseam.com\/egypt\/2020\/10\/12\/annual-core-inflation-rose-to-3-3-in-september-from-0-8-in-august\/","url_meta":{"origin":593854,"position":3},"title":"Annual core inflation rose to 3.3% in September from 0.8% in August","author":"enterpriseam admin","date":"12 October 2020","format":false,"excerpt":"Annual core inflation rose to 3.3% in September from 0.8% in August, while monthly core inflation rose to 0.1% from -2.3% the previous month, the Central Bank of Egypt said yesterday (pdf). Core inflation strips out volatile items such as food and fuel. We reported in more detail yesterday the\u2026","rel":"","context":"In &quot;Speed Round&quot;","block_context":{"text":"Speed Round","link":"https:\/\/enterpriseam.com\/egypt\/category\/speed-round\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/internal\/536550.png?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":573589,"url":"https:\/\/enterpriseam.com\/egypt\/2020\/08\/11\/egypts-inflation-decelerated-in-july-to-4-2-below-expectations\/","url_meta":{"origin":593854,"position":4},"title":"Egypt\u2019s inflation decelerated in July to 4.2%, below expectations","author":"enterpriseam admin","date":"11 August 2020","format":false,"excerpt":"Annual headline inflation decelerated to 4.2% in July, down from an uptick to 5.6% in June, according to central bank figures (pdf). The central bank attributed the decline to a favorable base effect. Monthly headline urban figures remained restrained at 0.4% in July, compared to 1.8% during the same month\u2026","rel":"","context":"In &quot;Speed Round&quot;","block_context":{"text":"Speed Round","link":"https:\/\/enterpriseam.com\/egypt\/category\/speed-round\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2020\/8\/75.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":594912,"url":"https:\/\/enterpriseam.com\/egypt\/2019\/09\/11\/egypts-headline-inflation-falls-to-six-and-a-half-year-lows-in-august\/","url_meta":{"origin":593854,"position":5},"title":"Egypt\u2019s headline inflation falls to six-and-a-half year lows in August","author":"enterpriseam admin","date":"11 September 2019","format":false,"excerpt":"Headline inflation falls to six-and-a-half year low in August, confounding expectations: Egypt\u2019s annual headline inflation rate fell to 7.5% in August from 8.7% in July, a low not seen January 2013, official data showed yesterday. Figures released by Capmas showed that monthly inflation slowed to 0.7% last month from 1.8%\u2026","rel":"","context":"In &quot;Speed Round&quot;","block_context":{"text":"Speed Round","link":"https:\/\/enterpriseam.com\/egypt\/category\/speed-round\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2019\/9\/1816.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]}],"_links":{"self":[{"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/posts\/593854","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/comments?post=593854"}],"version-history":[{"count":0,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/posts\/593854\/revisions"}],"acf:post":[{"embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/issue\/593849"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/media\/593855"}],"wp:attachment":[{"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/media?parent=593854"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/categories?post=593854"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/tags?post=593854"},{"taxonomy":"brand","embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/brand?post=593854"},{"taxonomy":"newspack_spnsrs_tax","embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/newspack_spnsrs_tax?post=593854"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}