According to RMB, the latest data shows annual inflation came in at 10.5 percent at the end of March as the effects of the Russia-Ukraine war exacerbate conditions in Egypt. The bank says price pressures continue in the country as inflation expectations rise amid higher food and oil prices. While these two factors have been the main protagonists, RMB indicates that core Consumer Price Index (CPI) rose to 10.1 percent over the same period – indicating higher prices across the CPI basket.
“We remain convinced that given the high core inflation, there will be an increase in interest rates at the next MPC seating, with benchmark rates expected to go up by 50bp (basis points),” RMB writes in its daily report. “We expect inflation to average 8.0 percent in 2022, with the current 12-month moving average at 6.3 percent, while year-to-date inflation is already at 8.9 percent.” The bank expects the second half of the year to have a downward trend inflation as prices stabilise and as the effects of a higher interest rate environment permeate through the economy.