ECONOMY

Egypt’s inflation rate spikes in June amid price hikes

The rise has been attributed to hike in the price of some commodities. (AP)

Following a new round of austerity measures designed to overhaul the country’s economy, Egypt’s annual inflation rate increased to 13.8 percent in June, the first increase reported in 11 months, according to the official statistics agency.

The figure, announced by the Central Agency for Mobilization and Statistics, covers the period from July 1, 2017 to June 30, 2018. In comparison, the rates in May were 11.5 percent, and covered June 1, 2017 to May 31.

The agency attributed the increase to a hike in the price of some commodities, including a 4 percent increase in vegetables and a 2 percent increase in cereals and bread (2 percent). Transportation fares also increased by 27.8 percent.

Housing, water, electricity, gas and other fuel prices hiked by 8.1 percent in June, according to CAMS. After the government cut fuel  and electricity subsidies, inflation peaked last summer at around 30 percent.

The increasing prices came as part of broader economic reforms to meet demands by the International Monetary Fund for a $12 billion bailout loan. Egypt secured the loan in 2016.

In June 2017, the annual inflation rate was 30.9 percent, according to the statistics agency. Since then, inflation figures showed a steady monthly decline that reached 11.5 in May, the lowest level in around two years.

June figures came in the wake of recent steep price hikes for fuel, drinking water and electricity, which were introduced by the government in the recent weeks.

The hikes came as Egypt pressed ahead with a broader economic reform program that includes slashing subsidies, imposing a value-added tax and a currency flotation. The tough austerity measures won praise from economists and business leaders but have come as a heavy blow to poor and middle-class Egyptians.

Egypt’s President Abdel-Fattah el-Sissi, the architect of the economic reforms, defended his government’s decision to slash subsidies. He urged Egyptians to be patient as the reforms take effect. Egypt’s economy is still recovering from unrest following the 2011 uprising that toppled longtime ruler Hosni Mubarak.

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Last Update: Tuesday, 10 July 2018 KSA 16:01 - GMT 13:01
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