Higher inflation in February FEBRUARY's annual headline consumer price index (CPI) read 9.2 per cent, up from 8.6 per cent in January. "Current inflation is considered high, compared to the economy's low growth levels," according to CI Capital Research. The cost of food and beverages, the biggest CPI component, increased 12.6 per cent, compared with 11.2 per cent a month earlier. Within food and beverages, meat and poultry saw the highest month on month increase, at 3.2 per cent. CI Capital attributed this to the eruption of the foot and mouth disease in cattle in late February, causing increased demand on poultry. CI Capital also attributed the overall rise in the annual inflation rate to "renewed tension in early February and maintained sectarian protests to date, which negatively impacted the supply distribution network. Moreover, the problems of LPG cylinder shortages in various governorates imposed more pressure." In the meantime, core CPI computed by the Central Bank of Egypt (CBE) increased by 0.52 per cent month on month in February, compared to 0.55 per cent in January. The annual rate went up to 7.3 per cent in February compared to 6.86 per cent in January. CI Capital believes "maintained domestic pressures will continue to fuel inflation." And given the need to support the local currency the CBE's Monetary Policy Committee will raise interest rates by 25 points in its next meeting, scheduled for 22 March. Energy subsidies increase EXPENDITURE on energy is expected to increase by 25 per cent to LE120 billion in fiscal year 2012/13, from LE96 billion in the current fiscal year, Egyptian Minister of Petroleum Abdallah Ghorab said. According to Ghorab, energy subsidies represent 72 per cent of total government expenditure on subsidies. Ghorab added that the government will present to parliament all the options available for dealing with energy subsidies when it comes to discuss the 2012/13 budget next month. He added that if only 10 per cent of energy subsidies -- coming to LE10 billion -- are saved, they can be directed to other projects for the benefit of citizens, including schools, hospitals, and housing. Energy subsidies in the past five years have cost the government close to LE500 billion, said Ghorab. He said that a tonne of mazout, sold at LE1,000, costs the government a subsidy of $500. And butane gas cylinders are sold for LE2.5, while their actual cost is LE76 each. Increased government spending on subsidies is a major cause of the government's growing budget deficit. While the budget deficit was targeted to reach LE134 billion in the current fiscal year, officials from the Ministry of Finance told parliament this week that it could go as high as LE150 billion. The government already has a deficit of LE88 billion for the first six months of the year alone. The widening budget is attributed to increased government spending on elections, as well as increasing wages and benefits for government employees. ICT fair in April THE 16TH ANNUAL Cairo Information and Communication Technology (ICT) Trade Fair and Forum will be held from 26 to 29 April at the Cairo International Conference Centre. The exhibition, which will carry the slogan "The Spring of Technologies", is an opportunity for all participants to discuss challenges, future investment opportunities and prospects for growth both locally and regionally. According to Hossam Saleh, executive vice president of Trade Fairs International, the company organising the fair, Egypt is currently witnessing positive political movements that must be paralleled with the desire to develop and grow at the same speed and with the same force in all sectors of the country. Saleh said that Turkey, Brazil and India were able in a short period of time to achieve high growth rates by developing their human resources and using ICT in different fields, especially with regards to political rights and legislation. The exhibition will witness the launching of the Cairo Security Summit, an event that specialises in offering and showcasing data security solutions and applications. In addition, the Cairo Telecom Summit will discuss prominent ICT sector issues as well as different Internet usages, fourth generation networks, long term evolution (LTE) and IPv6 applications.
