Egypt's annual urban inflation rises to 4.8% in May 2021: CBE

Annual headline inflation accelerated in May, mostly driven by higher annual contribution of volatile food items

The Central Bank of Egypt (CBE) has revealed that Egypt's annual urban inflation increased to 4.8% in May 2021 from 4.1% in April 2021
This comes as monthly urban inflation registered 0.7% in May 2021, compared to 0% in May 2020, which was affected by the containment measures associated with the novel coronavirus (COVID-19) pandemic.
Accordingly, annual headline inflation accelerated in May 2021, mostly driven by the higher annual contribution of volatile food items, whilst partially reflecting the unfavourable base effect.
The monthly headline urban inflation for May 2021 mainly reflected higher prices of food items.
The increase in food prices mainly reflected the increase in the prices of volatile food items, as prices of core food items remained broadly stable, despite slightly higher red meat prices mostly offset by lower poultry prices.
Meanwhile, higher prices of volatile food items reflected broad-based increases in the prices of fresh fruits, as well as higher prices of fresh vegetables.
In the meantime, non-food prices increased, mainly reflecting seasonally higher prices of clothing items for the second consecutive month. This was in addition to higher rental values, as well as higher prices of select fuel products, as announced by the automatic fuel pricing committee in April 2021.
On an annual basis, annual food inflation accelerated to 1.7% in May 2021 from -0.3% in April 2021, due to the higher annual contribution of volatile food items.
This comes as annual food inflation has fluctuated between negative and positive territories since September 2019.
On the other hand, annual non-food inflation increased slightly for the second consecutive month, to 6.3% in May 2021 from 6.1% in April 2021. The slight increase was mainly driven by the higher annual contribution of services items.
Against this background, monthly core inflation recorded 0.3% in May 2021, compared to 0.3% in May 2020. Accordingly, annual core inflation increased slightly to 3.4% in May 2021 from 3.3% in April 2021.
Both the whole country's annual inflation and annual rural inflation increased to record 4.9% in May 2021 from 4.4% and 4.7% in April 2021, respectively. Fresh vegetable prices increased for the third consecutive month by 4.9%, while prices of fresh fruits increased by 14.2%.
Together, fresh vegetables and fresh fruits contributed by 0.42% to monthly headline inflation.
Prices of red meat increased for the fifth consecutive month by 0.7%, to contribute by 0.03% to monthly headline inflation, whilst prices of fish and seafood increased for the second consecutive month by 0.8%. This meant they contributed by 0.02% to monthly headline inflation.
Prices of poultry declined by 0.5%, after having increased for five consecutive months, contributing by -0.02% to monthly headline inflation. Meanwhile, prices of other core food items, including cheese, pasta, and baked products, increased to contribute by 0.02% to monthly headline inflation.
Prices of retail items increased by 0.5% contributing by 0.07% to monthly headline inflation, mainly due to seasonally higher prices of clothing items.
Prices of services increased by 0.4%, to contribute by 0.12% to monthly headline inflation. This was mainly due to higher rental values and slightly higher prices of outpatient services.
Prices of regulated items increased by 0.13%, to contribute by 0.03% to monthly headline inflation. This was due to higher prices of select fuel products announced by automatic indexation mechanism.
Monthly core inflation was affected by price changes of the aforementioned core CPI items.
Services items contributed by 0.17% to monthly core inflation. In addition, Retail and core food items contributed by 0.10% and 0.06% to monthly core inflation, respectively.