© Reuters. FILE PHOTO: An Egyptian vegetable seller is seen at a market in Cairo, Egypt, December 10, 2018. REUTERS/Mohamed Abd El Ghany
By Patrick Werr
CAIRO (Reuters) – Headline inflation in Egypt is likely to have sped up in November, a Reuters poll showed on Tuesday, after a currency devaluation in October and continued restrictions on imports put renewed upward pressure on prices.
The median forecast of 14 analysts showed annual inflation at 18.75% in November, up from 16.2% in October and the highest since December 2017.
Jaap Meijer, head of research at Arqaam Capital, attributed the faster price increases to “higher import bills”.
The central bank imposed restrictions on imports in February before the Ukrainian crisis and has been devaluing the currency since March. On Oct. 27 it cut the Egyptian pound’s price by 14.5% and since then has been letting it weaken gradually.
“The currency had moved 25% from a year before, and that would add 2.5-5 percentage points in any country, and we’re up 10 percentage points,” said Charles Robertson, chief economist at Renaissance Capital.
“So foreign exchange was probably responsible for a third (of the price increases from) a year ago, oil maybe one-fifth and global wheat prices at least one-tenth. Together two-thirds of the rise would be easily attributable to the Egyptian pound, oil and food to end-October 2022.”
The analysts polled predicted that core inflation would jump to 21.60% from 19% in October.
The higher inflation would put pressure on the central bank to raise interest rates when it next meets on Dec. 22.
The state statistics agency CAPMAS will release inflation data for November on Thursday.