After two consecutive months of eased readings, the annual headline inflation rate accelerated in April 2020 to 5.9%, up from 5.3% in March. Meanwhile, the average price level remained elevated on a monthly basis, registering 1.3% in April, up from 0.6% in March. The reported figures came slightly above our expectation of 5.5% y/y but remain within the CBE’s inflation target of 9% ± 3%. We still see the current readings consistent with our projections of a stable inflation environment, where headline inflation and inflation expectations are still anchored around the CBE inflation target, despite the pandemic shock. However, we do not expect the CBE to deliver a change in its policy rates in the upcoming meeting on 14 May 2020, due to the limited effect of a further cut in policy rates would have, to support sentiment and market functioning at a time of protracted uncertainties
Mona Bedeir
Senior Economist
Tel.: +202 3300 5722