Headline and Core Inflation June 2019 · Headline and Core Inflation – June 2019 Annual headline...

5
Central Bank of Egypt Monthly Inflation Development 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. 4/ 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 8 th CPI series by the 9th series starting from August 2009 (Full details are discussed in the Technical Appendix of the August 2010 Inflation Note). 1 Headline and Core Inflation – June 2019 Annual headline urban inflation 1/ declined to 9.4 percent in June 2019 from 14.1 percent in May 2019, to record the lowest rate in more than three years. This decline was supported by strong favorable base effects, as monthly inflation recorded negative 0.8 percent in June 2019 compared to positive 3.5 percent in the same month of previous year, which incorporated the impact of the implemented fiscal consolidation measures in June 2018. Consumer price developments during June 2019 show declines in food prices, mainly volatile food due to lower prices of tomatoes and potatoes, while core food prices declined somewhat, mainly due to lower poultry prices. On the other hand, prices of services increased, mainly due to seasonally higher pilgrimage prices, while prices of retail items increased slightly, mainly due to clothing prices. Meanwhile, regulated prices remained unchanged . Against this background, monthly core inflation 2/ recorded 0.3 percent in June 2019 compared to 1.6 percent in June 2018, and annual core inflation declined to 6.4 percent in June 2019 from 7.8 percent in May 2019, also strongly supported by favorable base effects. Thus, annual core inflation recorded the lowest figure since October 2015 and continued to record single digits for twelve consecutive months. Meanwhile, nationwide annual inflation 1/ declined to 8.9 percent in June 2019 from 13.2 percent in May 2019, as rural annual inflation 1/ declined to 8.4 percent in June 2019 from 12.3 percent in May 2019. Headline and Core CPI Inflation 3/4/ (m/m, in percent) Source: Central Agency for Public Mobilization and Statistics and Central Bank of Egypt. Headline and Core CPI Inflation 3/4/ (y/y, in percent) Source: Central Agency for Public Mobilization and Statistics and Central Bank of Egypt. -4 -3 -2 -1 0 1 2 3 4 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Headline CPI Core CPI 0 4 8 12 16 20 24 28 32 36 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Feb-16 Apr-16 Jun-16 Aug-16 Oct-16 Dec-16 Feb-17 Apr-17 Jun-17 Aug-17 Oct-17 Dec-17 Feb-18 Apr-18 Jun-18 Aug-18 Oct-18 Dec-18 Feb-19 Apr-19 Jun-19 CPI - All Items (100%) CPI excl. regulated items, fruits & vegetables (74.43%)

Transcript of Headline and Core Inflation June 2019 · Headline and Core Inflation – June 2019 Annual headline...

Central Bank of Egypt Monthly Inflation Development

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.

4/ 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).

1

Headline and Core Inflation – June 2019 Annual headline urban inflation1/ declined to 9.4 percent in June 2019 from 14.1 percent in

May 2019, to record the lowest rate in more than three years. This decline was supported by strong favorable base effects, as monthly inflation recorded negative 0.8 percent in June 2019 compared to positive 3.5 percent in the same month of previous year, which incorporated the impact of the implemented fiscal consolidation measures in June 2018.

Consumer price developments during June 2019 show declines in food prices, mainly volatile food due to lower prices of tomatoes and potatoes, while core food prices declined somewhat, mainly due to lower poultry prices. On the other hand, prices of services increased, mainly due to seasonally higher pilgrimage prices, while prices of retail items increased slightly, mainly due to clothing prices. Meanwhile, regulated prices remained unchanged .

Against this background, monthly core inflation2/ recorded 0.3 percent in June 2019 compared to 1.6 percent in June 2018, and annual core inflation declined to 6.4 percent in June 2019 from 7.8 percent in May 2019, also strongly supported by favorable base effects. Thus, annual core inflation recorded the lowest figure since October 2015 and continued to record single digits for twelve consecutive months.

Meanwhile, nationwide annual inflation1/ declined to 8.9 percent in June 2019 from 13.2 percent in May 2019, as rural annual inflation1/ declined to 8.4 percent in June 2019 from 12.3 percent in May 2019.

Headline and Core CPI Inflation 3/4/

(m/m, in percent)

Source: Central Agency for Public Mobilization and Statistics and Central Bank of Egypt.

Headline and Core CPI Inflation 3/4/ (y/y, in percent)

Source: Central Agency for Public Mobilization and Statistics and Central Bank of Egypt.

-4

-3

-2

-1

0

1

2

3

4

Jun

-17

Jul-

17

Au

g-1

7S

ep-1

7O

ct-

17

Nov-1

7D

ec-1

7Jan

-18

Fe

b-1

8M

ar-

18

Ap

r-18

Ma

y-1

8Jun

-18

Jul-

18

Au

g-1

8S

ep-1

8O

ct-

18

Nov-1

8D

ec-1

8Jan

-19

Fe

b-1

9M

ar-

19

Ap

r-19

Ma

y-1

9Jun

-19

Headline CPI Core CPI

048

12162024283236

Jun

-14

Au

g-1

4O

ct-

14

Dec-1

4F

eb-1

5A

pr-

15

Jun

-15

Au

g-1

5O

ct-

15

Dec-1

5F

eb-1

6A

pr-

16

Jun

-16

Au

g-1

6O

ct-

16

Dec-1

6F

eb-1

7A

pr-

17

Jun

-17

Au

g-1

7O

ct-

17

Dec-1

7F

eb-1

8A

pr-

18

Jun

-18

Au

g-1

8O

ct-

18

Dec-1

8F

eb-1

9A

pr-

19

Jun

-19

CPI - All Items (100%)

CPI excl. regulated items, fruits & vegetables(74.43%)

Central Bank of Egypt Monthly Inflation Developments

2

Key Highlights:

Prices of fresh vegetables declined by 11.16

percent, while prices of fresh fruits increased

by 15.65 percent, respectively. Together they

contributed by negative 0.99 percentage

points to monthly headline inflation. Prices of

citrus fruits increased for the fifth

consecutive month to contribute by 0.37

percentage points to monthly headline

inflation. Meanwhile, prices of tomatoes

declined after increasing for two consecutive

months to contribute by negative 0.65

percentage points to monthly headline

inflation. In addition, prices of potatoes

declined for the third consecutive month to

contribute by negative 0.30 percentage

points to monthly headline inflation.

Prices of poultry declined by 3.75 percent, to

contribute by negative 0.17 percentage

points to monthly headline inflation.

Prices of fish and sea food increased by 1.27

percent, registering the sixth consecutive

increase, to contribute by 0.04 percentage

points to monthly headline inflation.

Prices of rice increased slightly by 0.22

percent, registering the ninth consecutive

Contribution to Monthly Headline CPI Inflation (in percentage points)

Source: Central Bank of Egypt.

Contribution to Annual Headline CPI Inflation (in percentage points)

Source: Central Bank of Egypt.

Contribution to Monthly Core CPI Inflation (in percentage points)

Source: Central Bank of Egypt.

-4

-3

-2

-1

0

1

2

3

4

Jun

-17

Jul-

17

Au

g-1

7S

ep-1

7O

ct-

17

No

v-1

7D

ec-1

7Jan

-18

Fe

b-1

8M

ar-

18

Ap

r-18

Ma

y-1

8Jun

-18

Jul-

18

Au

g-1

8S

ep-1

8O

ct-

18

No

v-1

8D

ec-1

8Jan

-19

Fe

b-1

9M

ar-

19

Ap

r-19

Ma

y-1

9Jun

-19

Fruits & Vegetables

Regulated Items

Core CPI

048

12162024283236

Jun

-17

Jul-

17

Au

g-1

7S

ep-1

7O

ct-

17

Nov-1

7D

ec-1

7Jan

-18

Fe

b-1

8M

ar-

18

Ap

r-18

Ma

y-1

8Jun

-18

Jul-

18

Au

g-1

8S

ep-1

8O

ct-

18

Nov-1

8D

ec-1

8Jan

-19

Fe

b-1

9M

ar-

19

Ap

r-19

Ma

y-1

9Jun

-19

Fruits & Vegetables

Regulated Items

Core CPI

-1

0

1

2

3

Jun

-17

Jul-

17

Au

g-1

7S

ep-1

7O

ct-

17

Nov-1

7D

ec-1

7Jan

-18

Fe

b-1

8M

ar-

18

Ap

r-18

Ma

y-1

8Jun

-18

Jul-

18

Au

g-1

8S

ep-1

8O

ct-

18

Nov-1

8D

ec-1

8Jan

-19

Fe

b-1

9M

ar-

19

Ap

r-19

Ma

y-1

9Jun

-19

Other Services

Paid Services

Retail Prices

Poultry & Red Meat

Food Prices excl. Poultry & Red Meat

Central Bank of Egypt Monthly Inflation Developments

3

increase, to contribute by 0.01 percentage

points to monthly headline inflation.

Prices of red meat increased slightly by 0.14

percent, for the second consecutive month,

after decreasing for five consecutive months,

to contribute by 0.01 percentage points to

monthly headline inflation.

Prices of other core food items remained

broadly stable.

Prices of services increased by 1.34 percent

to contribute by 0.27 percentage points to

monthly headline inflation. This was mainly

due to higher prices of pilgrimage services.

Prices of retail items increased by 0.39

percent to contribute by 0.04 percentage

points to monthly headline inflation. This was

mainly due to higher prices of clothing.

Prices of regulated items remained broadly

stable.

Monthly core inflation was affected by price

changes of the aforementioned core CPI

items. Services and retail items contributed

by 0.41 percentage points and 0.06

percentage points to monthly core inflation,

respectively, while core food items

contributed by negative 0.20 percentage

points to monthly core inflation.

Contribution to Annual Core CPI Inflation (in percentage points)

Source: Central Bank of Egypt.

0

4

8

12

16

20

24

28

32

36

Jun

-17

Jul-

17

Au

g-1

7S

ep-1

7O

ct-

17

Nov-1

7D

ec-1

7Jan

-18

Fe

b-1

8M

ar-

18

Ap

r-18

Ma

y-1

8Jun

-18

Jul-

18

Au

g-1

8S

ep-1

8O

ct-

18

Nov-1

8D

ec-1

8Jan

-19

Fe

b-1

9M

ar-

19

Ap

r-19

Ma

y-1

9Jun

-19

Other Services

Paid Services

Retail Prices

Poultry & Red Meat Prices

Food Prices excl. Poultry andRed Meat

Central Bank of Egypt Monthly Inflation Developments

4

Table 1. Classification of All Items included in Core CPI

Food Retail Paid Services Other Services

Bread and cereals Clothing Tailors, laundry & shoe repair 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

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

Central Bank of Egypt Monthly Inflation Developments

5

(in percent)

Headline - All items 100.00 274.83 300.60 -0.80 9.38

Food and beverages 39.92 347.84 383.81 -2.17 10.34

Tobacco and related products 2.19 520.70 573.50 0.03 10.14

Clothing and footwear 5.41 202.18 219.23 0.69 8.43

Housing, water, electricity, gas and

other fuels 18.37 166.75 179.27 0.00 7.51

Furnishings, household equipment and

routine maintenance of the dwelling 3.77 227.53 235.76 0.18 3.62

Medical care 6.33 216.20 228.58 0.12 5.72

Transportation 5.68 281.57 287.37 0.09 2.06

Communications 3.12 109.43 109.48 0.00 0.05

Recreation and Culture 2.43 303.12 357.23 8.08 17.85

Education 4.63 294.16 337.27 0.00 14.65

Hotels, cafes and restaurants 4.43 302.70 341.66 1.19 12.87

Miscellaneous goods and services 3.73 186.55 201.89 0.32 8.22

Selective aggregates

Fruits & vegetables 3/ 6.90 534.63 663.82 -6.16 24.16

Regulated items 18.66 274.32 300.60 0.09 9.58

Food excl. fruits & vegetables 31.08 321.53 339.02 -0.37 5.44

Retail items 14.48 210.71 223.40 0.39 6.03

Paid services 5.87 256.70 283.06 0.12 10.27

Other services 23.00 179.16 192.73 1.81 7.58

Core CPI 74.43 250.86 266.91 0.27 6.40

1/ Source: CAPMAS and CBE calculations

2/ Based on 2008/2009 Household Expenditure Survey

3/ Excluding pulses, processed vegetables and dried fruits

(January 2010 = 100)

Weight in

basket 2/June 2018 June 2019

June 2019 to

May 2019

(percentage change)(index)

June 2019 to

June 2018

Table 2. Consumer Price Index and Major Components 1/