Egypt August inflation driven to 7-year high

Bloomberg

Egypt’s annual inflation
rate accelerated to 15.5% in August, driven to its highest level in at least seven years
by the weakening of the currency and an increase in electricity prices.
Consumer prices rose 1.9 percent in the month, according to data published by the state-run CAPMAS statistics agency. Food and beverage prices, which account for the largest component of the basket of goods and services, climbed 19.3% in August compared to the previous year and 1.6 percent in the month.
“The numbers were going in that direction,” said Reham El-Desoki, senior economist at Dubai-based investment bank Arqaam Capital. “You have a very strong negative base effect at this point and it’s going to get worse.”
She predicted inflation would accelerate to as much as 20 percent by the end of the year. The August rate was the highest since Bloomberg started tracking the data in 2009, and El-Desoki said it was the highest since December 2008.
Inflation is quickening as Egypt tries to finalize a $12 billion International Monetary Fund loan. The government has promised to implement a range of economic reforms, including spending cuts and the new value-added tax parliament approved last month.
El-Desoki attributed the acceleration in August to factors including the “pass-through effect from the continuous fall of the Egyptian pound” on the black market and the increase in electricity prices by as much as 47 percent last month. The pound is trading on the black market at a discount of about 30 percent to its official rate against the dollar.