Egypt: Headline and Core Inflation - November 2021

Transcription

1. Monthly Inflation Developments Headline and Core Inflation – November 2021 ▪ Annual headline urban inflation1/ declined, for the second consecutive month, to record 5.6 percent in November 2021 from 6.3 percent in October 2021. This comes as monthly headline urban inflation recorded 0.1 percent in November 2021 compared to 0.8 percent in November 2020. The decline came supported by favorable base effects stemming from the transitory supply shock witnessed in tomato prices during November 2020. ▪ Monthly headline urban inflation1/ in November 2021 was mainly driven by non-food items. The increase in non-food items' prices reflected (1) the seasonal increase in clothes’ prices, (2) the increase in rental values, (3) the increase in prices of medical products and services and (4) the increase in expenditures on restaurants and cafes. All of which were mainly reflected in retail items and services. Meanwhile, prices of volatile food items declined, broadly in line with their seasonal pattern and the resulting increase of their supply, which was only partly offset by higher core food prices, especially red meat. Moreover, prices of regulated food items increased, reflecting higher prices of subsidized vegetable oils as announced by the ministry of supply and internal trade. This marks the second increase for rationed vegetable oil prices during 2021. This comes along with the broad-based increase of core food prices, especially market prices of edible vegetable oil and sugar, to reflect the continued impact of higher international food prices on domestic inflation as well as possibly the beginning of the impact of higher prices of subsidized fertilizers and higher natural gas prices for fertilizers and food industries factories, as recently announced by the government. It is worth to note that edible vegetable oil and sugar recorded annual inflation of 27.2 percent and 18.2 percent which are their highest rates since October 2017, respectively. ▪ On an annual basis, the decline in headline inflation during November 2021 was driven by the lower annual contribution of food items, which more than offset the higher annual contribution of non-food items. Annual food inflation decelerated, for the first time since April 2021, to record 8.1 percent in November 2021 from 11.6 percent in October 2021; due to the decline in the annual contribution of volatile food items. On the other hand, annual non- food inflation increased to 4.5 percent in November 2021 from 4.0 percent in October 2021, mainly reflecting higher annual contribution of rental values as well as higher prices of cafes and restaurants. ▪ Driven by the higher annual contribution of core food items and services, annual core inflation 2/ increased, for the third consecutive month, to record 5.8 percent in November 2021 from 5.2 percent in October 2021, partly affected by unfavorable base effects which reflect muted inflationary pressures during November 2020. This comes as monthly core inflation recorded 0.5 percent in November 2021 compared to zero in November 2020. ▪ Nationwide annual inflation1/ and annual rural inflation declined to record 6.2 percent and 6.8 percent in November 2021 from 7.3 percent and 8.4 percent in October 2021, respectively. Headline and Core CPI Inflation 3/ Headline and Core CPI Inflation 3/ (y/y, in percent) (m/m, in percent) 3 36 32 28 24 20 16 12 8 4 0 CPI - All Items Headline CPI Core CPI 2 CPI excl. regulated items, fruits & vegetables 1 Source: Central Agency for Public Mobilization and Statistics and Central Bank of Egypt. Nov-21 Sep-21 Jul-21 May-21 Mar-21 Jan-21 Nov-20 Sep-20 Jul-20 May-20 Mar-20 Jan-20 -1 Nov-19 Nov-21 May-21 Nov-20 May-20 Nov-19 May-19 Nov-18 May-18 Nov-17 May-17 Nov-16 0 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. 1
2. Monthly Inflation Developments Key Highlights : Contribution to Annual Headline CPI Inflation (in percentage points) respectively. Together, fresh vegetables and 4 fresh fruits contributed by negative 0.55 2 percentage points to monthly headline 0 ▪ ▪ contribute by negative 0.25 percentage points Source: Central Bank of Egypt. to monthly headline inflation. Contribution to Monthly Headline CPI Inflation (in percentage points) Prices of red meat increased by 2.1 percent, 2.0 which is the highest monthly increase since 1.5 April 2020, to contribute by 0.08 percentage 1.0 points to monthly headline inflation. 0.5 Prices of other edible oils increased by 8.1 Nov-21 Sep-21 Jul-21 May-21 Mar-21 Jan-21 Nov-20 Sep-20 Prices of poultry declined by 6.2 percent, to Jul-20 -2 May-20 inflation. ▪ 6 Mar-20 declined by 13.3 percent and 2.3 percent, Fruits & Vegetables Regulated Items Core CPI 8 Jan-20 Prices of fresh vegetables and fresh fruits Nov-19 ▪ Fruits & Vegetables Regulated Items Core CPI 0.0 -0.5 contribute by 0.03 percentage points to monthly headline inflation. ▪ Nov-21 Sep-21 Jul-21 May-21 Mar-21 Jan-21 Nov-20 Jul-20 Sep-20 Prices of sugar increased by 12.2 percent, to May-20 ▪ Mar-20 points to monthly headline inflation. Jan-20 -1.0 Nov-19 percent, to contribute by 0.04 percentage Source: Central Bank of Egypt. Contribution to Annual Core CPI Inflation (in percentage points) 7 Other Services Retail Prices Prices of other core food items, including fats Paid Services Core Food Prices 5 dairy products, rice, pasta, wheat flour, pulses and tea increased to contribute by 0.22 3 percentage points to monthly headline 1 inflation. Nov-21 Sep-21 Jul-21 May-21 Mar-21 Jan-21 Nov-20 Sep-20 Jul-20 May-20 Mar-20 percent, to contribute by 0.32 percentage Jan-20 -1 Prices of regulated items increased by 1.3 Nov-19 ▪ Source: Central Bank of Egypt. 2
3. Monthly Inflation Developments points to monthly headline inflation . This was mainly due to the increase in the prices of Contribution to Monthly Core CPI Inflation (in percentage points) 2 Other Services Retail Prices rationed vegetable oils, for the second time in 2021, by 19.0 percent. 1 Prices of services increased by 0.5 percent, to Nov-21 Sep-21 Jul-21 May-21 Mar-21 Jan-21 Nov-20 Jul-20 Sep-20 expenditures on restaurants and cafes, and May-20 due to the increase in rental values, -1 Mar-20 monthly headline inflation. This was mainly 0 Jan-20 contribute by 0.17 percentage points to Nov-19 ▪ Paid Services Food Prices Source: Central Bank of Egypt. the prices of private hospitals’ services. ▪ Prices of retail items increased by 0.7 percent, to contribute by 0.09 percentage points to monthly headline inflation. This was mainly due to seasonally higher prices of clothing. ▪ Monthly core inflation was affected by price changes of the aforementioned core CPI items. Services items contributed by 0.24 percentage points to monthly core inflation. Core food items contributed by 0.16 percentage points to monthly core inflation. In addition, retail items contributed by 0.13 percentage points to monthly core inflation. 3
4. Monthly Inflation Developments Table 1 : Classification of All Items included in Core CPI Food Bread and cereals Retail Clothing Paid Services Tailors, laundry & shoe repair Other Services Rentals (new law) Meat Fabrics Dwelling maintenance services Rental value of owner occupied housing Fish and other seafood Footwear Portman & gardener's services Hospital services Eggs & Dairy products Products related to dwelling repairement Cook & maid's services Transportation Services Oils and fats Furniture Technicians to HH appliances Mobile & internet services Dried fruits Carpets and other floor covering Repairs of Audio-visual equipment Recreational & sporting services Processed vegetables Household (HH) textiles Physicians Cultural services Pulses HH appliances Mechanics Hajj & Omra trips Sugar and confectionery Glassware, tableware and HH utensils Teachers Restaurants and Cafes Other food products HH small tools & supplies Hairdressers Accommodation services Beverages HH cleaning products Private schools HH miscellaneous products Summer & Winter Vacations 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 4
5. Monthly Inflation Developments Table 2 : Consumer Price Index and Major Components 1/ Weight in basket 2/ November 2020 (in percent) November 2021 (index) November 2021 to October 2021 November 2021 to November 2020 (percentage change) (Average 2018/2019 = 100) Headline - All items 100.00 111.07 117.24 0.15 5.56 Food and beverages 32.73 101.56 109.82 -0.47 8.14 Tobacco and related products 4.41 113.28 116.95 -0.15 3.25 Clothing and footwear 4.38 108.32 109.65 1.62 1.23 Housing, water, electricity, gas and other fuels 19.46 109.17 113.27 0.37 3.75 Furnishings, household equipment and routine maintenance of the dwelling 3.93 106.40 108.66 0.16 2.12 Medical care 8.59 116.85 119.79 0.80 2.51 Transportation 6.66 120.57 125.94 0.26 4.46 Communications 2.75 104.48 105.19 0.52 0.67 Recreation and Culture 2.24 117.26 134.56 0.03 14.75 Education 5.49 150.97 170.21 0.00 12.75 Hotels, cafes and restaurants 4.98 117.40 120.46 0.88 2.61 Miscellaneous goods and services 4.37 113.34 116.38 0.24 2.68 Fruits & vegetables 3/ 5.46 116.83 109.24 -9.71 -6.50 Regulated items 21.44 121.87 131.37 1.34 7.80 Food excl. fruits & vegetables 24.51 98.07 108.01 0.49 10.14 Retail items 14.34 109.64 112.11 0.68 2.25 Paid services 6.96 124.44 132.96 0.35 6.85 Other services 27.30 110.46 114.73 0.55 3.87 Core CPI 73.09 105.54 111.66 0.53 5.79 Selective aggregates 1/ Source: CAPMAS and CBE calculations 2/ Based on 2017/2018 Household Expenditure Survey 3/ Excluding pulses, processed vegetables and dried fruits 5