Energy subsidy cuts trigger June jump in Egypt consumer inflation

CAIRO: Egypt’s annual urban consumer inflation surged to 14.4 percent in June as cuts to energy subsidies imposed under an IMF loan deal hit the economy sooner than expected.

The speed at which June’s increases in fuel, electricity and transportation fares hit the economy surprised economists, who said interest rates could now stay high for longer.

The data, from the official statistics agency CAPMAS, followed 10 months of steady decline in the key measure of inflation, which was 11.4 percent in May.

The price hikes were part of efforts to meet the terms of a $12 billion International Monetary Fund loan programme from late 2016 that included cuts in energy subsidies and tax increases.

Published in Business Recorder, 11th July, 2018