Inflation fell from 20.9% in November to 18.7% in December due to the 3.4% decrease in the prices of food and beverages. Experts predicted that the central bank would not lower the current interest rate despite the decline in inflation. The Central Agency for Public Mobilization and Statistics (CAPMAS) said inflation in rural areas went up to 19.1%. It also said that prices of grain and bread went down by 3% in December compared with November, meat by 9%, dairy products by 2.6%, oil by 2.9%, vegetables by 14.8%, sugar and sugary food by 5%, while prices of coffee, tea, mineral water and juices remained the same. Yet prices of fruit rose by 38% and fish and seafood by 20.7%. Professor of Economics at the Egyptian Center for Studies Dr. Omneya Hilmi said inflation declined when world prices went down by 10-15%. Yet it was not proportionate due to the high profit margins and transport costs. She expected a continued decline in the inflation rate to 12-14% in the first half of 2009. Dr. Samir Radwan, a member of the General Authority for Investment, said low inflation would not push the central bank to reduce interest rates in the coming period, as inflation is not the only factor that determines the interest rates.
