Egypt: Headline and Core Inflation - July 2017

Transcription

1. Central Bank of Egypt Monthly Inflation Developments Headline and Core Inflation – July 2017 Headline urban CPI for July 2017, published by the Central Agency for Public Mobilization and Statistics on August 10, 2017, increased by 3.22 percent (m/m) compared to 0.82 percent (m/m) in June. Consequently, the annual headline inflation rate rose to 32.95 percent in July 2017 from 29.76 percent in June. Inflation during July was affected by an expected upward adjustment of regulated prices and a higher VAT rate in the context of the fiscal reform program. Prices of hydrocarbon products increased to improve cost-recovery ratios, which had an indirect impact on prices of inland transportation, food items as well as cafés and restaurants. Given price increases in core items that have a higher relative weight in core CPI vis-à-vis headline CPI, core inflation computed by the Central Bank of Egypt increased by 2.76 percent (m/m) in July 2017 compared to 1.80 percent (m/m) in June, leading the annual rate to increase to 35.26 percent in July 2017 from 1 31.95 percent in June. . 6 5 4 Monthly Headline and Core CPI Inflation (in percent) Headline CPI Core CPI Headline and Core CPI Inflation 1/ (year-on-year percentage change) 36 32 20 2 16 1 12 0 8 CPI excl. regulated items, fruits & vegetables (74.43%) Core 24 3 CPI - All Items (100%) Headline 28 4 -1 Jul-15 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 Jul-12 Sep-12 Nov-12 Jan-13 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 0 -2 Source: CAPMAS and the CBE Source: CAPMAS and the CBE 1. Headline CPI2 Headline CPI increased by 3.22 percent (m/m) in July 2017 compared to 0.82 percent (m/m) in June. Accordingly, the annual headline inflation rate rose to 32.95 percent in July 2017 from 29.76 percent in June. Contributions to Monthly Headline CPI Inflation (in percent) Fruits & Vegetables 4.4 Regulated Items 3.4 Core CPI 2.4 1.4  -0.6 -1.6 Source: CBE Contributions to Annual Headline CPI Inflation (in percent) 36 32 Fruits & Vegetables 28 Regulated Items Prices of fresh vegetables and fruits increased by 2.65 and 0.12 percent, respectively. Together they contributed by 0.29 percentage points to monthly headline inflation. 24 Core CPI Prices of red meat continued to increase, rising by 6.40 percent, while prices of poultry decreased by 5.88 percent, contributing by 0.55 percentage points and negative 0.30 percentage points to monthly headline inflation, respectively. 4 20 16 12 8 0 Jul-15 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  0.4 Jul-15 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 Key Highlights  As part of the fiscal reform program, prices of motor fuels, fuel oils, butane cylinders and inland transportation were adjusted upward. The price increases registered 33.16, 34.35, 24.63 and 4.01 percent, respectively, and contributed jointly by 0.49 percentage points to monthly headline inflation. Other regulated prices also rose, mainly tobacco, public hospitals, landline telephone and medical products, which contributed jointly by 0.50 percentage points to monthly headline inflation. Source: CBE 1
2. Central Bank of Egypt Monthly Inflation Developments    Prices of other food items, including bread, fats, fish and sea food, bakery products, processed vegetables, pulses and tea, picked up to contribute jointly by 0.37 percentage points to monthly headline inflation. Prices of other services increased by 3.08 percent to contribute by 0.48 percentage points to monthly headline inflation. The increase was driven by café and restaurant services, inland transportation as well as furniture moving services. Prices of paid services increased by 7.33 percent to contribute by 0.39 percentage points to monthly headline inflation. This was mainly due to higher prices of outpatient services, vehicle maintenance, tailoring, laundry and shoe repair as well as maintenance services of dwellings. Prices of retail items rose slightly by 0.68 percent to contribute by 0.08 percentage points to monthly headline inflation. This was mainly due to higher prices of motor oil and medical products. 2. Core Inflation2 Core CPI computed by the Central Bank of Egypt increased by 2.76 percent (m/m) in July 2017 compared to 1.80 percent (m/m) in June. Accordingly, the annual core inflation rate rose to 35.26 percent in July 2017 from 31.95 percent in June. Monthly price dynamics were mainly driven by previously mentioned core food items, which contributed by 1.42 percentage points to monthly core inflation. This came in addition to the increase in the prices of other services, paid services and retail items, which contributed by 0.68, 0.55 and 0.11 percentage points to monthly core inflation, respectively. Contributions to Monthly Core CPI Inflation 6 5 4 3 (in percent) Other Services Paid Services Retail Prices Poultry & Red Meat Food Prices excl. Poultry & Red Meat 2 1 0 -1 Jul-15 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  Prices of milk, cheese and eggs increased by 7.80, 3.68 and 4.11 percent, respectively. Together they contributed by 0.37 percentage points to monthly headline inflation. Source: CBE 36 32 28 24 20 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 16 12 8 4 0 Jul-15 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  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). 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 basket 2/ (in percent) July 2016 July 2017 (index) July 2017 to June 2017 July 2017 to July 2016 (percentage change) (January 2010 = 100) 100.00 186.53 248.00 3.22 32.95 39.92 227.32 323.57 2.45 42.34 Tobacco and related products 2.19 323.94 464.24 8.10 43.31 Clothing and footwear Housing, water, electricity, gas and other fuels 5.41 136.42 177.58 0.91 30.17 18.37 130.82 143.80 2.07 9.92 Furnishings, household equipment and routine maintenance of the dwelling 3.77 158.16 202.27 0.06 27.89 Medical care 6.33 172.48 209.06 7.59 21.21 Transportation 5.68 144.83 201.02 10.71 38.80 Communications 3.12 96.91 101.63 3.08 4.87 Recreation and Culture 2.43 192.95 285.46 0.98 47.94 Education 4.63 219.01 246.00 0.00 12.32 Hotels, cafes and restaurants 4.43 216.62 292.35 9.02 34.96 Miscellaneous goods and services 3.73 127.14 159.27 -0.34 25.27 6.90 367.67 486.98 2.13 32.45 Regulated items 18.66 178.02 221.56 6.10 24.46 Food excl. fruits & vegetables 31.08 203.87 300.96 2.62 47.63 Retail items 14.48 144.70 188.97 0.68 30.60 Paid services 5.87 189.72 230.81 7.33 21.66 Other services 23.00 141.17 167.70 3.08 18.79 Core CPI 74.43 171.87 232.46 2.76 35.26 Headline - All items 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