Annual urban headline inflation increased as expected but remains within the CBE’s target. Annual urban headline inflation accelerated to 4.8% in May 2021, up from 4.1% in April 2021, the highest annual reading since December 2020. The inflation was mainly driven by the unfavorable base-year effect and the surge in food prices. Food inflation recorded its highest level in five months, reaching +1.75% y/y, up from -0.19% y/y in April, mainly against the backdrop of the increase in fruits and vegetables prices. Meanwhile, non-food inflation remained almost stable at +6.2% y/y in May vs. 6.1% in April, driven by the contribution of education, housing, utilities, and clothing baskets.
Mona Bedeir
Senior Economist
T +202 3300 5722