Egypt inflation peaks to three-year high of 16pc

[Dr. A ♥ O 203]

Egypt inflation peaks to three-year high of 16pc

CAIRO: Urban inflation in Egypt jumped to a fresh three-year peak last month as food prices surged, adding pressure on the country's central bank to raise interest rates for a third time.

The rise in inflation also adds to the political pressure on the Egyptian government, which has faced a wave of strikes and protests over price increases.

Poor Egyptians, who spend a disproportionate amount on food, have been hard hit by higher prices for rice, meat, vegetables, cooking oil and other foodstuffs.

The government, one of the world's biggest wheat importers, has had trouble maintaining adequate supplies of cheap subsidised bread.

Urban inflation in Egypt rose to 16.4 per cent in the year to last month, from 14.4pc in the year to March, the state statistics agency CAPMAS said.

It was the highest since December 2004, when inflation hit 17.3pc.

The rise was mainly driven by food prices, which rose 22pc in the year, CAPMAS head Abu Bakr el-Guindi said.

Prices for bread and grains jumped 31.9pc, meat by 17.5pc and fish by 15pc.

President Hosni Mubarak promised a 30pc increase in public sector salaries, but to raise the extra revenue the government decided to increase fuel and cigarette prices.

Guindi said the latest price rises would show in the inflation figure for May, which will come out in June. He said the government's decision to raise prices "will have more effect on the poor and lower middle class."

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