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CAIRO - Egypt's headline inflation is expected to have risen to an annual 12.0% in October after an increase in fuel prices and a new law allowing landlords to raise rents, a Reuters poll found.
The median forecast of 14 analysts polled by Reuters was for annual headline urban consumer inflation to have risen, from 11.7% in September. The higher inflation would end a four-month-long downward trend.
Four analysts also provided predictions for core inflation, which omits volatile items such as certain food and fuel products. They predicted it would drop to a median 11.0% from 11.3% in September. The polling data was collected over November 3-6.
Sri Virinchi Kadiyala of Abu Dhabi's ADCB, who forecast that inflation would accelerate to 12.5%, said inflation would be driven higher by rising prices for food, fuel prices, housing and utilities.
The government on October 17 increased the price of a wide range of fuel products by nearly 13%.
A new law letting landlords raise monthly rents took force in early August, applicable with the first subsequent rent payment. This means the first increases would have been reflected in September inflation figures.
M2 money supply growth, at an annual 22.9% in September, was little changed from August, central bank data showed.
Annual inflation has plunged from a record high of 38% in September 2023, helped by an $8 billion financial support package signed with the IMF in March 2024.
Slowing inflation prompted the Central Bank of Egypt (CBE) to cut its overnight lending rate by 100 basis points on October 2, following a 200-basis-point cut on August 28, the third and fourth reductions this year.
"This is unlikely to derail the anticipated November CBE rate cut, as the elevated real rate buffer offers the central bank ample room to reduce rates," Kadiyala said.
The central bank's monetary policy committee is scheduled to meet on November 20 to review overnight interest rates.
($1 = 47.5000 Egyptian pounds)
(Polling by Anant Chandak Writing by Patrick Werr Editing by Peter Graff)
