May 9, 2019 / 9:40 AM / 2 months ago

UPDATE 1-Egypt headline inflation drops to 13.0 pct in April -CAPMAS

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CAIRO, May 9 (Reuters) - Egypt’s annual urban consumer price inflation eased to 13.0 percent in April from 14.2 percent in March, official statistics agency CAPMAS said on Thursday.

“The figures are lower than our expectations,” said Radwa El-Swaify, head of research at Pharos Securities Brokerage. “This month was the lowest month-on-month increase in three years.”

Urban inflation rose 0.5 percent month-on-month in April, CAPMAS said, down from 0.8 percent in March.

Egypt has been carrying out an IMF-backed economic reform programme since 2016 which saw inflation rise to a high of 33 percent the following year.

It has since subsided, though rising fruit and vegetable prices have prolonged inflationary pressures.

“We expect next month’s figures to see a rise between 0.5 and 1 percentage points and for current rises in vegetable prices to be reflected,” Swaify said.

Continuous increases in fruit and vegetable prices had prompted the interior ministry and the military to sell some basic foods at below-market prices.

“Based on our analysis, increased efforts made by the government to provide the market with ample supplies of volatile food items (fruits, meat and vegetables) prior to the Ramadan season, has helped cool off the supply/demand pressures on inflation,” Naeem Brokerage, which predicted headline inflation would fall to 13.2 percent, said in a note on Wednesday.

CAMPAS said urban food and beverage prices saw a rise of 13.0 percent year-on-year and 0.5 percent month-on-month.

Millions of people in Egypt, the Arab world’s most populous country, live below the poverty line. They are struggling to meet basic needs after successive increases in the prices of vegetables, fruit, fuel and medicine. (Reporting by Aidan Lewis, Ehab Farouk and Yousef Saba)

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