CAIRO: Urban consumer price inflation in Egypt fell in the year to November to its lowest in 15 months, giving the central bank room to keep its benchmark interest rates unchanged in December to support economic growth.
Inflation in the 12 months to November was 10.2 percent, down from 11 percent in October, the state statistics agency CAPMAS said on its website on Wednesday, below analysts’ forecasts.
The annual rate slid to its lowest level since August 2009, when it reached 9 percent year-on-year.
Three analysts cited forecasts for urban inflation — the most closely watched indicator of prices — that ranged from 11.1 percent to 11.8 percent. The average of the forecasts was 11.46 percent.
"This further reiterates that there will be no change in interest rates in the coming meeting," said Mohamed Rahmy, Beltone Financial economist, also citing limited impact from European economic woes.
Several economists expect a rate hike could be introduced by the middle of 2011.
The central bank on Nov. 4 kept its key overnight interest rates steady at a four-year-low, saying non-food price inflation was largely subdued and global economic growth was uncertain.
The bank held its overnight lending rate steady at 9.75 percent and the deposit rate at 8.25 percent, the ninth time it has done so since it stopped cutting rates in September 2009. It also left the discount rate unchanged at 8.5 percent.
Prices of food and beverages, which account for 44 percent of the weighting of the basket Egypt uses to measure inflation, decelerated year-on-year to 17.1 percent in November, from 19.9 percent in October.
CAPMAS released inflation figures on Wednesday on its website. It earlier said the figure would be released on Thursday.
A Reuters poll of 12 economists predicted GDP growth would reach 5.5 percent in fiscal year 2010/11, up from 5.2 percent in the year that ended in June.
Egypt revised down its gross domestic product growth figure for the April-June quarter to 5.4 percent from a previously stated 5.9 percent.
The next policy meeting of the central bank’s Monetary Policy Committee is scheduled for Dec. 16.
