Trump says ceasefire in Syria is holding despite few skirmishes    Johnson faces perilous Brexit ratification after Brexit deal vote blocked    China's economic growth could fall below 6% in 2020: IMF    Salah returns to Liverpool's trainings on Monday, says Egypt's coach    Lebanon set to cut ministers' pay in bid to defuse protests    Banks weigh on Saudi stocks ; other Gulf mixed    Match abandoned in latest blow to Mexican football    Tennis: Murray beats Wawrinka to win first title since hip surgery    Spanish PM to visit Barcelona, criticises regional chief    EBRD bank praises Egyptian reforms efforts – official    Sisi: Russia-Africa Summit reflects historic friendship ties    Parliament committee to address problem of stray dogs in Egypt    Shell Egypt to sell assets in Western Desert to focus on offshore exploration    WHO hails 'triumph' as Ebola vaccine gets European green light    Current and ex smokers may lower lung cancer risk with exercise    Lebanon agrees final budget with no taxes to appease protesters    Egypt's Sisi praises SCC's role in protecting justice, rights, freedoms    France's President Macron receives Egypt's Coptic Pope Tawadros II at Elysee    Egypt inks deal with Euroclear Bank to upgrade public debt management    Egypt's Cooperative Insurance Society to cover NGOs clients' loans    After a young pupil dies of meningitis in Egypt, tips to help prevention    Egypt's PM urges US's ADTRAN Inc. to invest in communications equipment    French President Macron receives Egypt's Coptic Pope Tawadros II at Elysee    'Passports should be valid for six months,' Egypt's foreign ministry advises citizens planning travel abroad    Grand Nile Tower Arts & Cultural Centre launches second round    Egypt's coach Hossam El-Badry satisfied with winning start despite technical problems    Luxor's new discoveries    Moroccan film Nomades scoops awards in Alexandria Film Festival    Toshiba's JV with Egyptian Elaraby opens regional HQ in South Africa    Six authors vie for Booker prize 2019, Atwood in the lead    In Photos: A sneak peek into rehearsals for the Cleopatra ballet world premiere    Sisi, Ethiopia's PM to meet in Moscow to discuss GERD issue    Sisi: army engaged in attrition phase against terrorism in Sinai since 2013    10K fans to attend Egypt's friendly against Botswana in Alexandria: EFA    Sisi, Ethiopia's PM agree to overcome obstacles in Nile dam talks    Farwell to Egyptian comic actor Talaat Zakaria    Court sentences six to death, 41 to lifetime imprisonment violence related case    Trump says he would release Mideast peace plan after Israeli elections    ACWA Power compares 3 bids to supply production units for Luxor power station    What do you know about gold alloying?    NBE announces EGP 2.5m prizes for handball youth teams for their world achievements    Jennifer Lopez evokes Egyptian outrage post her North Coast performance    Al-Sisi honours Egypt's scholars on Science Day    IS claims responsibility for suicide bombing killing 63 in Afghan wedding    Political parties gear up for parliamentary, senate, local elections    Unprecedented Glory: Egypt win Men's U-19 World Handball Championship    12th National Egyptian Theatre Festival fuel up public theatre art scene    Ministry of Environment has a plan for "black clouds season"    

Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.

Seasonal fall in vegetable prices behind decline in inflation in January
Value-added, reduction of imports, and depreciation of the pound stand behind curbing inflation next year: Hermes
Published in Daily News Egypt on 10 - 02 - 2016

The annual inflation rate registered its first decline on an annual level to 10.7% after rising for six consecutive months, closing at 11.7% in 2015, according to the Central Agency for Public Mobilisation and Statistics (CAPMAS) in a press release issued yesterday.
At the same time, the monthly inflation rate increased slightly by 0.1%. The decline, on both levels, was caused by the increase of vegetables prices during the second half of 2015, according to Economist at EFG-Hermes Mohammad Abu Basha. He noted that Hermes expectations stood at 10.5%.
Vegetable prices recorded an increase of up to 36.5% during the period from July to October before they began to stabilise in the last two months. Abu Basha explained that vegetables are seasonal, thus their prices fluctuate. The Central Bank of Egypt (CBE) excludes vegetables and fruit from core inflation indicators to give a real visulisation of prices.
Vegetable prices recorded a decline of 13.2% during the period between November and January, making them the main factor in driving inflation towards relative stability.
According to the statement of CAPMAS, the price of vegetables decreased by 5.0%, meat and poultry rose by 2.6%, grains and bread by 1.5%, traditional goods and services by 6.1%. The annual inflation rate in December recorded 11.9% in 2015, while the monthly inflation rate stood at 0.1%.
Abu Basha believes this month will be the last for inflation to decrease or stabilise. Inflation will go through a series of hikes in the upcoming months, amounting to 10-12%. The recent decisions taken by the government will reduce imports and raise customs, in addition to the government's intention to impose value-added tax in the coming period.
"Imports restrictions will have the least impact on inflation, while VAT will cause the greatest impact," Abu Basha said. "Depreciation of the pound by CBE will also affect inflation."
The government, especially CBE and the Ministry of Industry and Trade, recently took a number of decisions that will limit the import, such as limiting imports to registered trademarks and increasing tariffs on some imported goods.
At the same time, Prime Minister Sherif Ismail announced that the government intends to present the value-added bill to parliament in the upcoming period to be imposed in 2016.
"CBE itself, in the last meeting of the Coordinating Council, said it targets inflation in the coming period," he said. "This is an implicit recognition of the prediction of inflationary wave."
Abu Basha said another interest rate increase is likely to happen in the upcoming period, provided that prices continue to go up or the pound continues to decline against the dollar.
CBE raised the interest rate by 0.5% in the last meeting of the Policy Committee, bringing the deposit and lending rates to 9.25% and 10.25% respectively. Abu Basha said the decision was due to the increasing inflation rate during the last few months of 2015.
According to EFG Hermes, the average inflation in 2016 is expected to reach 9.5%. However this figure may be revised in case VAT is applied. "The average will then go up," he said.
Core annual inflation increased to 7.73% this January compared to 7.23% in December 2015. Meanwhile monthly inflation in January declined to 0.98% versus 0.10% in December.

Clic here to read the story from its source.