Egypt: Headline and Core Inflation - August 2017

Transcription

1. Central Bank of Egypt Monthly Inflation Developments Headline and Core Inflation – August 2017 Monthly headline (urban) CPI inflation for August 2017, published by the Central Agency for Public Mobilization and Statistics on September 10, 2017, declined to 1.13 percent from 3.22 percent in July 2017. Given the favorable base effect due to the relatively lower monthly inflation rate in August 2017 compared to August 2016, annual headline inflation declined to 31.92 percent from 32.95 percent in July 2017. Headline inflation was mainly driven by regulated items, affected by the increase in electricity prices, as well as fresh vegetables. Core food items registered the lowest increase since August 2016. Prices of services were only affected by higher inland transportation prices – an indirect effect of the hydrocarbon-subsidy reforms implemented end of June 2017, while prices of retail items remained broadly unchanged. Excluding the increase of electricity and inland transportation prices, monthly headline inflation narrows to 0.58 percent, registering the lowest since January 2016. Consequently, monthly core inflation, computed by the Central Bank of Egypt, registered the lowest since July 2016, dropping to 0.31 percent in August 2017 from 2.76 percent in July 2017. Accordingly, annual core inflation declined 1 to 34.86 percent in August 2017 from 35.26 percent in July due to a favorable base effect. . 6 5 4 Monthly Headline and Core CPI Inflation (in percent) 36 Headline CPI 28 Core CPI 3 Headline and Core CPI Inflation 1/ (year-on-year percentage change) 32 24 Headline Core 20 2 CPI - All Items (100%) CPI excl. regulated items, fruits & vegetables (74.43%) 16 1 12 0 8 -1 4 1. Headline CPI2 Monthly headline (urban) CPI inflation declined to 1.13 percent in August 2017 from 3.22 percent in July. Annual headline inflation declined to 31.92 percent in August 2017 from 32.95 percent in July due to a favorable base effect. Key Highlights    Prices of regulated items rose by 3.01 percent to contribute by 0.50 percentage points to monthly headline inflation. This was mainly due to the upward adjustment of electricity prices by 26.21 percent in the context of the fiscal reform program. Prices of fresh vegetables increased by 4.83 percent while prices of fresh fruits declined by 4.16 percent. Together they contributed by 0.41 percentage points to monthly headline inflation. Prices of red meat continued to increase, rising by 2.06 percent, while prices of poultry decreased by 1.87 percent for the third consecutive month. Together they contributed by 0.10 percentage points to monthly headline inflation. Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Feb-16 Apr-16 Jun-16 Aug-16 Oct-16 Dec-16 Feb-17 Apr-17 Jun-17 Aug-17 Source: CAPMAS and the CBE 5 Contributions to Monthly Headline CPI Inflation (in percent) Fruits & Vegetables 4 Regulated Items Core CPI 3 2 1 0 -1 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 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 Source: CAPMAS and the CBE 0 Source: CBE 32 30 28 26 24 22 20 18 16 14 12 10 8 6 4 2 0 Contributions to Annual Headline CPI Inflation (in percent) Fruits & Vegetables Regulated Items Core CPI Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 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 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 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 -2 Source: CBE 1
2. Central Bank of Egypt Monthly Inflation Developments Prices of fish and sea food decreased by 0 .90 percent to contribute by negative 0.03 percentage points to monthly headline inflation.  Prices of other food items, including fats, dried fruits and processed vegetables, contributed jointly by 0.11 percentage points to monthly headline inflation.  Prices of other services increased slightly by 0.30 percent to contribute by 0.05 percentage points to monthly headline inflation, driven by higher inland transportation prices.  Prices of retail items and paid services remained broadly unchanged. 2. Core Inflation2 Monthly core CPI inflation, computed by the Central Bank of Egypt, dropped to 0.31 percent in August 2017 from 2.76 percent in July. Annual core inflation declined to 34.86 percent in August 2017 from 35.26 percent in July due to a favorable base effect. 36 34 32 30 28 26 24 22 20 18 16 14 12 10 8 6 4 2 0 Contributions to Annual Core CPI Inflation (in percent) Other Services Paid Services Retail Prices Poultry & Red Meat Prices Food Prices excl. Poultry and Red Meat Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 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  Source: CBE 1/ 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. 2/ It is important to underscore that the monthly percentage changes of both headline and core CPI between September 2009 and July 2010 do not match rates of changes presented in previous inflation notes given the replacement of the 8th CPI series by the 9th series starting from August 2009 (Full details are discussed in the Technical Appendix of the August 2010 Inflation Note). Monthly price dynamics were mainly driven by previously mentioned core food items, which contributed by 0.24 percentage points to monthly core inflation. This came in addition to the increase in the prices of other services which contributed by 0.07 percentage points to monthly core inflation, while the contribution of paid services and retail items was negligible. 6 5 4 Contributions to Monthly Core CPI Inflation (in percent) Other Services Paid Services Retail Prices Poultry & Red Meat Food Prices excl. Poultry & Red Meat 3 2 1 0 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 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 -1 Source: CBE 2
3. 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 3
4. Central Bank of Egypt Monthly Inflation Developments Table 2 . Consumer Price Index and Major Components 1/ Weight in August 2017 to August 2016 August 2017 basket 2/ July 2017 (in percent) (index) August2017 to August 2016 (percentage change) (January 2010 = 100) Headline - All items 100.00 190.13 250.81 1.13 31.92 39.92 231.03 327.16 1.11 41.61 Tobacco and related products 2.19 323.94 464.24 0.00 43.31 Clothing and footwear Housing, water, electricity, gas and other fuels 5.41 136.42 177.58 0.00 30.17 18.37 138.73 149.94 4.27 8.08 Furnishings, household equipment and routine maintenance of the dwelling 3.77 161.89 202.27 0.00 24.94 Medical care 6.33 172.48 209.06 0.00 21.21 Transportation 5.68 148.17 205.11 2.04 38.42 Communications 3.12 96.92 101.63 0.00 4.86 Recreation and Culture 2.43 202.35 285.46 0.00 41.07 Education 4.63 219.01 246.00 0.00 12.32 Hotels, cafes and restaurants 4.43 216.62 292.35 0.00 34.96 Miscellaneous goods and services 3.73 129.76 159.53 0.16 22.94 6.90 386.24 501.70 3.02 29.89 Regulated items 18.66 186.22 228.23 3.01 22.56 Food excl. fruits & vegetables 31.08 204.51 302.31 0.45 47.82 Retail items 14.48 146.46 189.04 0.04 29.07 Paid services 5.87 190.28 230.81 0.00 21.30 Other services 23.00 142.45 168.20 0.30 18.08 Core CPI 74.43 172.92 233.20 0.31 34.86 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 4