{"id":660349,"date":"2025-02-10T00:00:00","date_gmt":"2025-02-10T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2025\/02\/10\/annual-headline-urban-inflation-dips-0-1-percentage-point-to-24-0-in-january\/"},"modified":"2025-02-10T00:00:00","modified_gmt":"2025-02-10T00:00:00","slug":"annual-headline-urban-inflation-dips-0-1-percentage-point-to-24-0-in-january","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2025\/02\/10\/annual-headline-urban-inflation-dips-0-1-percentage-point-to-24-0-in-january\/","title":{"rendered":"Annual headline urban inflation dips 0.1 percentage point to 24.0% in January"},"content":{"rendered":"

Good afternoon all you wonderful people, and happy Monday. <\/strong>We have a busy issue for you today, with January\u2019s inflation reading, the health effects of early sugar exposure, and a grab-bag of Valentines Day events on the docket for today.<\/p>\n

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THE BIG STORY TODAY<\/p>\n

Inflation dips slightly to 24.0% y-o-y in January: <\/strong>Annual headline urban inflation slowed slightly to 24.0% in January, a 0.1 percentage point drop from 24.1% y-o-y in December<\/a>, according to data out this morning from state statistics agency Capmas. The reading marks Egypt\u2019s lowest inflation reading since December 2022 and the third consecutive month of declines in the metric.<\/p>\n

F&B price inflation rose on both monthly and yearly bases: <\/strong>Food and beverage price inflation \u2014 the largest component of the basket of goods and services used to calculate headline inflation \u2014 rose by 0.5 percentage points in January to record 20.8% y-o-y. On a monthly basis, food and beverages prices were up by 1.8%.<\/p>\n

The slowdown was less significant than expected: <\/strong>While the reading was in line with the 24.0% y-o-y rate anticipated<\/a> by local analysts polled by Morgan Stanley last month, who cited a \u201crecent softness\u201d in fruit and vegetable prices, it was a percentage point higher than the median forecast of 17 analysts polled by Reuters<\/a> last week, who expected January\u2019s reading to fall to 23% y-o-y. <\/p>\n

The continued decline could spell CBE rate cuts:<\/strong> The sustained decline could offer the Central Bank of Egypt room to begin its monetary easing cycle when the Monetary Policy Committee meets next week to decide on interest rates, though the slight decline could potentially weigh on the size of the cut. \u201cThere\u2019s room for the Central Bank of Egypt (CBE) to reduce interest rates by around 100-200 bps, but it\u2019s more likely for it to fall by 100 bps due to the slower-than-expected drop in the inflation reading,\u201d economist Mona Bedeir told EnterpriseAM.<\/p>\n

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THE BIG STORY ABROAD<\/p>\n

Today\u2019s international headlines continue to be all Donald Trump, all day, <\/strong>with global media outlets continuing to assess the impact of the US president\u2019s newly announced<\/a> 25% steel and aluminum tariffs, which are set to impact producers from Brazil to China.<\/p>\n

The new tariffs are set to damage economic relationships with key US allies: <\/strong>Canada \u2014 which supplied a whopping 79% of the US\u2019 aluminum imports in the first 11 months of 2024 \u2014 decried Trump\u2019s move<\/a>, with the country\u2019s innovation minister Francois-Philippe Champagne noting that \u201cCanadian steel and aluminum support key industries in the US from defence, shipbuilding, and auto.\u201d Meanwhile, the European Commission asserted<\/a> that it would \u201creact to protect the interests of European businesses, workers and consumers from unjustified measures,\u201d adding that it had not received notification of any new levies from the US government.<\/p>\n

We\u2019ve seen this movie before:<\/strong> The new tariffs are a variation on the 25% tariff on steel and 10% tariff on aluminum that Trump put into place during his first term. While Trump eventually offered Canada and Mexico \u2014 two of the three largest sources of US steel and aluminum, alongside China \u2014 exemptions from the tariff measures, the two countries face a decidedly less friendly US administration this time around, with both facing a 25% tariff on all US imports set to go into effect 1 March after a temporary delay<\/a>.<\/p>\n

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