Inflation down THE ANNUAL headline inflation read 8.3 per cent in May, below April's 8.8 per cent, according to the Central Agency for Public Mobilisation and Statistics. It declined by 0.24 per cent month-on-month (m/m) in May compared to a 0.98 per cent m/m increase in April. In the meantime, the core consumer price index computed by the Central Bank of Egypt declined by 0.52 per cent m/m in May compared to a 0.56 per cent m/m increase in April. The annual rate decelerated to 7.22 per cent in May from 8.36 per cent in April. Depressed spending levels and lower oil prices supported the ease in the inflation rate. Though oil prices dropped seven per cent year-on-year (Y/Y) to an average of $94.43 per barrel in May, down from $103.3 per barrel a month earlier, food prices maintained their 10.8 per cent rise. BOP deficit widens EGYPT'S balance of payments (BoP) deficit increased to $11.2 billion in the first nine months of 2011/12, up from $5.5 billion a year earlier. The current account deficit reached $6.4 billion during the same period while the trade deficit widened to $23.5 billion. Transfers increased to $13.3 billion up from $9.2 billion in the same period the year before. According to CI Capital, the third quarter (Q3) of 2011/12 saw a narrowed BoP deficit of $3.2 billion, down from a deficit of $5.6 billion in the second quarter and $6.1 billion in Q3 2010/11. A major contributor to this was a reduced capital and financial accounts deficit, which came in at $1.3 billion compared to a deficit of $4.6 billion in Q3 2010/11. However, on a negative note, the current account deficit widened to $2.3 billion, up from $2.1 billion a year earlier, while the trade deficit reached $7.9 billion on the back of lower-than-expected exports. Although transfers held strong, a widened balance of goods and services pressured the current account deficit. On the services side, tourism revenues reached $2 billion, marking an 11 per cent year-on-year growth, given the low base in 2011. And at $1.3 billion, net portfolio investment registered a lighter outflow over the quarter, down from an outflow of $5.5 billion in Q3 2010/11. Moreover, Q3 2011/12 saw foreign direct investment inflows of $0.6 billion compared to an outflow of $0.2 billion a year earlier and an outflow of $0.9 billion in the second quarter of 2011/12. Risky Cairo CAIRO is categorised among the highest risk cities for employers in the Middle East and North Africa region and the world according to the findings of the 2012 People Risk Index created by Aon Hewitt, the global human resources business. It came 112th out of 131 countries listed. Dubai, meanwhile, was categorised as the lowest risk city in the region. It came 29th. Dubai also finished higher on the People Risk Index than leading international business hubs such as Tokyo, Paris, Berlin, Vienna, Madrid, Barcelona and Manchester. Sanaa and Damascus ranked the lowest of all cities listed in the survey. The Aon Hewitt 2012 People Risk Index measures the risks that organisations face with recruitment, employment and relocation in 131 cities worldwide, analysing 30 qualitative and quantitative factors across five areas, including demographics, education, government support, talent development and employment practices. In the area of demographics, the key risk factors that differentiate low-risk MENA cities from high-risk cities include higher workforce productivity due to a more stable economic environment, and future availability of a workforce due to younger populations and population inflow. In contrast, there is a higher rate of emigration in the high-risk group, reducing the available workforce in such cities. Regarding government support, the key risk factors that differentiate high-risk MENA cities from low-risk cities are primarily higher risks of terrorism, political instability, and violence and crime. Across the Arab Spring, high-risk cities were more affected by political and economic instability, giving rise to uncertainty in terms of government support and relations. As for education, low-risk cities typically have high literacy rates of approximately 90 per cent compared to high-risk cities with literacy rates that range from 56 per cent to 83 per cent. In addition, there are comparatively lower enrolment rates that affect the availability of entry-level and professional talent, thus increasing recruitment risk for companies. In talent development, there is a trend of decreased supply of qualified talent in high-risk cities, made worse by insufficient training by governments, private institutions and companies. Talent in high-risk cities is not ready for entry level, technical or managerial positions, the report said. Thus, companies in high-risk cities are required to invest in sourcing the right talent or raising the qualifications of employees they have access to. As for employment practices, high-risk cities have greater restrictions and companies will face greater difficulty and cost in downsizing their workforce in such cities. These cities also have medium-high to high risks in terms of healthcare and retirement benefits, as governments do not provide significant support. In addition, cities in the MENA region in general suffer from a lack of equal opportunities, which can severely limit the available workforce pool.
