Inflation in the 12 months to October was 11 percent, the
state statistics agency CAPMAS said on its website on Wednesday, on the higher
end of analysts’ forecasts.
Six analysts cited forecasts for urban inflation — the most
closely watched indicator of prices — that ranged from 10.5 percent to 11.1
percent. The average of the forecasts was 10.83 percent.
“The rate is slightly below our estimates ...It is probably
because food prices eased a bit in the year to October,” said Alia Mamdouh,
economist at CI Capital Research, who had forecast inflation would rise to 11.1
percent.
“I think the central bank is going to hold interest rates
steady in December,” she added, estimating a rate hike could be introduced by
the middle of 2011.
The central bank on Thursday kept its key overnight interest
rates steady at a four-year-low, saying non-food inflation was largely subdued
and global economic growth was uncertain.
The bank held its overnight lending rate steady at 9.75
percent and the deposit rate at 8.25 percent, its ninth pause since it stopped
cutting rates in September 2009. It also left the discount rate unchanged at
8.5 percent.
Economists expect inflation to reach 10.9 percent in the
year to end-June before dipping to 10 percent in the next fiscal year.
Prices of food and beverages, which account for 44 percent
of the weighting of the basket Egypt uses to measure inflation, slightly dipped
to 19.3 percent in the year to October, from 21.3 percent in September.
Although urban inflation has fallen from a peak of 23.6
percent in August 2008, it reignited late last year, climbing to as high as
13.6 percent in January.
Core annual inflation accelerated to 7.75 percent in the
year to October from 7.59 percent in September, the central bank said on
Wednesday, at the top end of analysts’ forecasts.
Four out of six analysts polled by Reuters forecast core annual
inflation slightly dipping to an average of 7.58 percent in the year to
October. Forecasts ranged from 7.4 percent to 7.7 percent.
Core inflation strips out subsidized goods and volatile
items including fruit and vegetables.
A Reuters poll of 12 economists predicted GDP growth would
reach 5.5 percent in fiscal year 2010/11, up from 5.2 percent in the year that
ended in June.
Egypt last month revised down its gross domestic product
growth figure for the April-June quarter to 5.4 percent from a previously
stated 5.9 percent.
The next policy meeting of the central bank’s Monetary
Policy Committee is scheduled for Dec. 16.
