(Adds core inflation, analyst comment)
CAIRO, April 10 Egypt's urban consumer inflation
rose at a slower pace in March and core inflation dipped, the
first signs of stabilising prices after the shock from a huge
President Abdel Fattah al-Sisi is under increasing pressure
to revive the economy, keep prices under control and create jobs
to avoid a backlash from the public.
Urban inflation rose for the fifth consecutive month to
reach an annual 30.9 percent, the official CAPMAS statistics
agency said on Monday, its highest point in more than three
However the rise from 30.2 percent in February was the
smallest since Egypt abandoned its currency peg in November,
driving up the price of imports.
The pound currency has since depreciated by roughly half and
in Egyptian cities and towns, food and beverage inflation
reached 41.8 percent year on year in March.
Annual core inflation, on the other hand, declined for the
first time in eight months, reaching 32.25 percent in March from
33.1 percent in February, the central bank said in a statement.
"The deceleration in core inflation is in line with the
expected headline deceleration in March," said Reham El Desoki,
senior economist at Arqaam Securities.
"March 2017 was a month void of significant inflationary
pressures, where price rises slowed and a lower customs dollar
rate stabilized the cost of imports," El Desoki said
Egypt abandoned its currency peg of 8.8 to the U.S. dollar
on Nov. 3 but the pound has been stable around 18 per dollar for
the past two weeks.
March's annual urban consumer inflation figure is the
highest since June 1986, when it reached 35.1 percent, according
to Reuters data. However, monthly urban inflation eased to 2
percent in March from 2.6 percent in February.
The central bank accompanied the November float with a 3
percent interest rate hike to fight price pressures but
inflation is expected to keep climbing as the government pushes
on with economic reforms, including fuel subsidy cuts.
The economic reforms helped Egypt secure a $12 billion loan
programme from the International Monetary Fund in November.
Egypt's central bank has held interest rates steady at four
monetary policy meetings since the currency flotation although
some economists expect further rate hikes this year.
IMF mission chief for Egypt Chris Jarvis said in January the
fund expects inflation to begin dropping sharply by the second
quarter of 2017.
(Reporting by Asma Alsharif; Editing by Toby Chopra)