Meanwhile, annual core inflation continued to be supported by favourable base effects since March 2017, dropping to 30.6% in May from 33.1% in February. Additionally, higher prices of hydrocarbon products, effective on 29 June 2017, higher value added taxes effective on 1 July 2017, higher electricity prices in July 2017, as well as other potential regulated price adjustments further increase inflationary pressures. The structure of economic growth shifted with declining contribution of consumption and increasing contribution of net exports, as well as investment to a lesser extent. Tourism, natural gas, trade, construction, and non-petroleum manufacturing were the main sectors driving economic growth. As soon as underlying inflation starts to moderate, the MPC envisages a measured easing of the monetary stance to allow for a reduction in interest rates.

Source: Daily News Egypt July 06, 2017 21:45 UTC