Egypt: Monthly Inflation Developments - March 2018

Transcription

1. Central Bank of Egypt Monthly Inflation Developments Headline and Core Inflation – March 2018  Annual headline1/ and core2/ (urban) inflation continued to decline, recording 13.3 percent and 11.6 percent in March 2018 compared to 14.4 percent and 11.9 percent in February 2018, after peaking in July 2017 at 33.0 percent and 35.3 percent, respectively. The headline and core annual rates thereby registered the lowest since May and April 2016, respectively.  This decline was supported by tighter real monetary conditions aimed at containing underlying inflation, and was accelerated by favorable base effects since November 2017. The recent annual headline inflation data release remains consistent with the CBE’s inflation outlook and with achieving its average inflation target of 13% (±3%) during 2018 Q4.  Monthly headline inflation in March 2018 registered 1.0 percent, compared to 0.3 percent in February 2018. The relatively higher monthly inflation rate is in line with seasonal patterns witnessed historically. Monthly headline inflation was largely driven by higher food prices for the second consecutive month and by higher prices of Omra trips by a lesser extent. Headline and Core CPI Inflation 3/4/ Headline and Core CPI Inflation 3/4/ (m/m, in percent) (y/y, in percent) Headline CPI CPI - All Items (100%) CPI excl. regulated items, fruits & vegetables (74.43%) Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 Core CPI 36 32 28 24 20 16 12 8 4 0 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 6 5 4 3 2 1 0 -1 -2 Source: Central Agency for Public Mobilization and Statistics and Central Bank of Egypt. Source: Central Agency for Public Mobilization and Statistics and Central Bank of Egypt. 1/ Published by the Central Agency for Public Mobilization and Statistics. 2/ Computed by the Central Bank of Egypt. 3/ CAPMAS publishes three CPI series: (1) the CPI for urban areas which include Cairo, Alexandria, urban Lower Egypt, urban Upper Egypt, Canal cities and Frontier governorates, (2) the CPI for rural areas, and (3) the CPI for All areas. Numbers quoted in this note refer to CPI-Urban. 4/ It is important to underscore that the monthly percentage changes of both headline and core CPI between September 2009 and July 2010 do not th match rates of changes presented in previous inflation notes given the replacement of the 8 CPI series by the 9th series starting from August 2009 (Full details are discussed in the Technical Appendix of the August 2010 Inflation Note). 1
2. Central Bank of Egypt Monthly Inflation Developments  Higher prices of food items in March 2018 were mainly driven by seasonally higher prices of fresh vegetables and by higher prices of some core food items, mainly poultry and fish, while other core food prices remained stable.  Given increases of core food and Omra prices, monthly core inflation recorded 0.7 percent in March 2018, compared to 0.4 percent in February 2018. 2
3. Central Bank of Egypt Monthly Inflation Developments Contributions to Monthly Headline CPI Inflation Key Highlights :  (in percentage point) Prices of fresh vegetables and fruits 5.5 increased by 4.24 percent and 2.08 percent 4.5 and contributed by 0.46 percentage points 2.5 and 0.05 percentage points to monthly 1.5 Fruits & Vegetables Regulated Items Core CPI 3.5 0.5 headline inflation, respectively. -0.5  Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 -1.5 Poultry prices increased by 5.30 percent to contribute by 0.21 percentage points to Source: Central Bank of Egypt. monthly headline inflation. Contributions to Annual Headline CPI Inflation Fish and seafood prices increased by 5.07 percent to contribute by 0.17 percentage points to monthly headline inflation.  Prices of red meat and other core food items remained stable.  (in percentage point) 36 32 28 24 20 16 12 8 4 0 Prices of services increased by 0.47 percent after remaining broadly stable since December 2017 due to higher prices of Omra trips, which contributed by 0.10 Source: Central Bank of Egypt. Contributions to Monthly Core CPI Inflation (in percentage point) percentage points to monthly headline  Prices of retail items increased slightly by 0.07 percent due to higher personal vehicle prices, to contribute by 0.01 percentage points to monthly headline inflation. 6 5 4 3 2 1 0 -1 Other Services Paid Services Retail Prices Poultry & Red Meat Food Prices excl. Poultry & Red Meat Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 inflation. Fruits & Vegetables Regulated Items Core CPI Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18  Source: Central Bank of Egypt. 3
4. Central Bank of Egypt Monthly Inflation Developments Monthly core inflation was affected by price Contributions to Annual Core CPI Inflation increases of the aforementioned core food (in percentage point) items, which contributed by 0.55 percentage points to monthly core inflation. Meanwhile, prices of services contributed by 0.14 percentage points to monthly core inflation, while the contribution of retail prices was marginal at 0.01 percentage points. 36 32 28 24 20 16 12 8 4 0 Other Services Paid Services Retail Prices Poultry & Red Meat Prices Food Prices excl. Poultry and Red Meat Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18  Source: Central Bank of Egypt. 4
5. Central Bank of Egypt Monthly Inflation Developments Table 1 . Classification of All Items included in Core CPI Food Retail Paid Services Other Services Bread and cereals Meat Fish and other seafood Eggs & Dairy products Oils and fats Clothing Fabrics Footwear Products related to dwelling repairement Furniture Tailors, laundry & shoe repair Dwelling maintenance services Portman & gardener's services Cook & maid's services Technicians to HH appliances Rentals (new law) Rental value of owner occupied housing Hospital services Transportation Services Mobile & internet services Dried fruits Carpets and other floor covering Repairs of Audio-visual equipment Recreational & sporting services Processed vegetables Pulses Sugar and confectionery Other food products Beverages Household (HH) textiles HH appliances Glassware, tableware and HH utensils HH small tools & supplies HH cleaning products HH miscellaneous products Purchase of vehicles Spare parts Motor oil Telephone & telefax equipment Home entertainment equipment Recreational equipment Personal care supplies and products Personal effects Books School supplies Medical care goods Physicians Mechanics Teachers Hairdressers Cultural services Hajj & Omra trips Restaurants and Cafes Accommodation services Private schools 5
6. Central Bank of Egypt Monthly Inflation Developments Table 2 . Consumer Price Index and Major Components 1/ Weight in March 2017 basket 2/ (in percent) March 2018 (index) March 2018 to February 2018 March 2018 to March 2017 (percentage change) (January 2010 = 100) Headline - All items 100.00 230.50 261.20 0.99 13.32 39.92 298.44 333.80 1.75 11.85 Tobacco and related products 2.19 429.47 518.35 0.00 20.70 Clothing and footwear Housing, water, electricity, gas and other fuels 5.41 156.93 190.99 0.00 21.71 18.37 140.89 155.85 0.00 10.62 Furnishings, household equipment and routine maintenance of the dwelling 3.77 201.31 223.46 0.00 11.00 Medical care 6.33 194.31 209.06 0.00 7.59 Transportation 5.68 181.36 205.51 0.20 13.32 Communications 3.12 98.59 109.41 0.00 10.97 Recreation and Culture 2.43 219.19 304.00 3.45 38.70 Education 4.63 246.00 294.16 0.00 19.58 Hotels, cafes and restaurants 4.43 263.97 293.23 0.00 11.08 Miscellaneous goods and services 3.73 159.06 185.31 0.04 16.50 6.90 450.50 520.38 3.811 15.51 Regulated items 18.66 208.83 247.87 0.000 18.70 Food excl. fruits & vegetables 31.08 276.79 306.68 1.04 10.80 Retail items 14.48 180.14 203.26 0.07 12.83 Paid services 5.87 215.04 255.51 0.00 18.82 Other services 23.00 155.14 170.68 0.64 10.02 Core CPI 74.43 215.53 240.50 0.70 11.59 Food and beverages Selective aggregates Fruits & vegetables 3/ 1/ Source: CAPMAS and CBE calculations 2/ Based on 2008/2009 Household Expenditure Survey 3/ Excluding pulses, processed vegetables and dried fruits 6