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Supply shocks and hoarding sparked Egypt's November inflation: Beltone Last month's violence in central Cairo may have inspired a change in spending habits that contributed to a 9.1 per cent rise in urban inflation, claims investment bank
November's violence and political turmoil may have sparked supply shocks and caused an outbreak of hoarding which sent Egypt's urban inflation rocketing, a Cairo-based investment bank has claimed. Egypt's urban headline inflation climbed to 9.1 per cent year-on-year in November, according to data from official statistics agency CAPMAS on Saturday. For the previous four months inflation had been slowing, falling to 7.1 per cent year-on-year in October. Inflation also climbed on a monthly basis to reach 1 per cent in November, up from 0.3 per cent the month before. Investment bank Beltone Financial said in a note Sunday that the surge was likely triggered by mid-November's upheaval, when Egyptian protesters demanding an end to military rule battled security forces in central Cairo for nearly a week. "[These events] most probably caused a disruption in the supply chain, and caused supply shocks in the market that elevated prices of certain goods such as food and clothing and footwear," said Beltone's note. The bank also speculated that the prospect of prolonged clashes and a possible curfew might have affected Egyptians' spending habits. "Fears over similar events unfolding such as those of 28 January and imposed curfews might have caused hoarding behavior of consumers, which led prices to increase," the note added. "In addition, a depreciated currency could have also begun to impact prices through the import channel." A major driver of urban headline inflation was the surge in tobacco prices, which jumped 41 per cent year-on-year in November, up from 29.6 per cent the month before. Tobacco prices also increased by a monthly 8.8 per cent after seeing no movement in October. Food prices spiralled too, climbing 11.6 per cent year-on-year in November, up from 8.7 per cent the month before. They rose 0.4 month-on-month in November, after declining 0.45 per cent throughout October. Clothing and footwear, shelter and basic equipment also saw their prices rise in November. These three items witnessed no monthly price increases in October 2011.
