Annual headline urban inflation increased slightly to 7.2% in January 2020 from 7.1% in December 2019, as monthly inflation recorded 0.7% in January 2020 compared to 0.6% in January 2019. The Central Bank of Egypt (CBE) explained that monthly headline inflation was mainly driven by higher food prices as well as by higher nonfood prices, but to a lesser extent. Higher food prices mainly reflected seasonally higher-than-average prices of poultry, as well as higher prices of fresh vegetables, but was partly offset by lower prices of fresh fruits. Prices of services inched up slightly mainly due to higher rental values. Meanwhile, prices of other Consumer Price Index (CPI) items remained broadly stable. The CBE said that monthly core inflation recorded 0.7% in January 2020 compared to 0.4% in January 2019. Accordingly, annual core inflation increased to 2.7% in January 2020 from 2.4% in December 2019. Moreover, nationwide and rural annual inflation remained stable at 6.8% and 6.5% in January 2020, respectively. The CBE noted that the prices of fresh vegetables increased by 5.57%, registering the first increase after three consecutive months of decline. Meanwhile, prices of fresh fruits declined by 3.66%, to resume their decline since August 2019, except for December 2019. Prices of fresh vegetables and fruits contributed together by 0.13% to monthly headline inflation. Prices of poultry increased by 9.2%, registering the second consecutive increase after six consecutive months of decline, to contribute 0.34 percentage points to monthly headline inflation. The CBE pointed out that the prices of other core food items, including rice, fish, seafood, eggs, and pulses, increased to contribute together by 0.05 percentage points to monthly headline inflation. It noted that the prices of services increased by 0.25%, to contribute by 0.09 percentage points to monthly headline inflation. This was mainly due to higher rental values as well as higher prices of cafes and restaurants. Prices of regulated items increased slightly by 0.17%, to contribute by 0.04 percentage points to monthly headline inflation. This was due to higher prices of medical products as well as vehicle operating expenses. The CBE also reported that the prices of retail items increased slightly by 0.15%, to contribute by 0.02 percentage points to monthly headline inflation. This was mainly because of higher prices of medical products and clothing. In addition, monthly core inflation was affected by price changes of the aforementioned core CPI items. Core food items and services items contributed by 0.54 and 0.12 percentage points to monthly core inflation, respectively. Meanwhile, retail items contributed slightly by 0.03 percentage points to monthly core inflation.
