Monday,19 November, 2018
Current issue | Issue 1409, (13-19 September 2018)
Monday,19 November, 2018
Issue 1409, (13-19 September 2018)

Ahram Weekly

Inflation edges up

Egypt’s annual inflation rate rose to 14.2 per cent in July on the back of hikes to fuel and electricity prices, reports Sherine Abdel-Razek

 

Inflation edges up
Inflation edges up

The annual inflation rate rose to 14.2 in July compared to 13.5 per cent in June on the back of recent hikes in fuel and electricity prices, the Central Agency for Public Mobilisation and Statistics (CAPMAS) has reported.

The rise keeps the annual inflation rate within the Central Bank of Egypt’s (CBE) target of 13 per cent (plus or minus three per cent) until the end of this year.

“A breakdown of the data showed that last month’s rise in inflation was due in large part to a rise in food prices. Food prices account for 40 per cent of the basket of commodities and services according to which inflation is measured and increased by 11.6 per cent year-on-year in August, compared with a 9.6 per cent in July,” said a note by Capital Economics, a research group based in London.

The increases in the prices of fruit and vegetables, likely to be an effect of underlying hikes in energy prices, are felt particularly by consumers. “A bowl of green salad for a family now costs LE25, and the least expensive fruit is now LE15 a kg,” said one shopper who spoke to Al-Ahram Weekly.

“We had to cut our consumption of meat earlier this year because it had become unaffordable. Now it is time to limit our vegetable and fruit purchases as well,” said Umm Rabie, the wife of a janitor in the Cairo suburb of Heliopolis.

The impact of a popular campaign calling for boycotting the purchase of fruit and vegetables because of their high prices has been felt differently from one neighbourhood to another.

Residents of some areas of Heliopolis said the prices of fruit and vegetables were the same, but some fruit and vegetable vendors in the more popular area of Hadayek Al-Kobba said they had had to lower prices as demand had been weak due to the campaign.

 This has urged consumers not to buy vegetables or fruit in protest at what it says has been profiteering, saying instead that shoppers should “let them rot”.

“The problem is that pricing is determined in consecutive stages. A farmer sells a wholesaler his products at a very low price, the wholesale merchant then sells them to a retailer at a higher price, who then adds a further margin when he sells them to the consumer,” commented Sayed Ahmed, one of the founders of the campaign.

Ahmed said he was happy at the impact of the campaign as he claimed that prices at the Obour wholesale market had fallen by up to 50 per cent. “This is a huge success. The prices of plums, for example, decreased from LE35 to LE25 a kg,” he said, adding that the campaign’s Facebook page now had more than 20,000 followers.

Capital Economics expects that Egypt’s inflation rate will resume its downward trend over the coming months.

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