Shaimaa Hefzy

The annual and monthly inflation rate in Egyptian cities slowed for the second consecutive month in May, in line with the expectations of most analysts, despite rising prices for the food and beverage group, the largest component of the index, and the continued repercussions of the Iran war.

According to data released Wednesday by Egypt's Central Agency for Public Mobilization and Statistics, the annual urban inflation rate slowed to 14.6% in May from 14.9% in April. This was in line with expectations in a Reuters poll of 15 analysts, which predicted inflation would slow to 14.5% due to favorable base effects.

Prices for the food and beverage group rose by 7.6% in May, compared to 6.7% in April.

Meanwhile, the monthly inflation rate rose during May to 1.6% from 1.1% in April, according to the data.

Inflation accelerated sharply in March after the government raised fuel prices to mitigate the fallout from the Iran war, which had driven oil prices to record highs. Egypt is heavily reliant on imports to meet its needs, and the Egyptian pound has faced pressure from capital outflows.

Analysts predict that inflation could rise again in the coming months due to electricity price pressures and rising prices, according to Reuters.

(Prepared by: Shaimaa Hefzy, for contact: zawya.arabic@lseg.com)

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