CAIRO (Reuters) -Egypt’s annual urban consumer inflation quickened to a faster-than-expected 13.1% year on year in April, data from state statistics agency CAPMAS showed on Tuesday.
The inflation figure, up from 10.5% in March, exceeded a median forecast of 11.8% in a Reuters poll of 17 analysts. [EGCPY=ECI]
The accelerating inflation will add pressure on the central bank to raise interest rates when it meets next week. The bank’s target inflation rate is 5-9%.
“Inflation came higher than expected due to a sharp rise in food prices in light of the devaluation and Ukraine war,” said Mohamed Abu Basha of EFG Hermes.
The central bank devalued the currency by 14% on March 21 after having left it little changed for nearly a year and a half.
“The Central Bank of Egypt is likely to hike rates 50-100 basis points in its next meeting considering the elevated inflation and hawkish Fed,” Abu Basha said.
The bank on Tuesday said core inflation, which strips out volatile items such as food, rose to 11.9% year on year in April from 10.1% in March.
The U.S. Federal Reserve raised its benchmark overnight interest rate by half a percentage point on May 4, the biggest jump in 22 years.
(Reporting by Nadine Awadalla, Lilian Wagdy and Mahmoud Salama; Writing by Patrick Werr; Editing by Andrew Heavens, Tomasz Janowski and Mark Porter)
