CentralBankofEgypt

MonthlyInflationDevelopments

HeadlineandCoreInflationMarch2012

Headline CPI published by the Central Agency for Public Mobilization and Statistics on April 10, 2012, in
creasedby1.22percent(m/m)inMarchcomparedto0.67percent(m/m)inFebruary.Meanwhile,thean
nualratedeclinedto9.03percentinMarchfrom9.19percentinthepreviousmonth,supportedbyfavor
ablebaseeffectsfromlastyear.Themonthonmonthdevelopmentsweremainlydrivenbyincreasesinthe
pricesofselectfooditems,primarilypoultry,fishandseafood,fruits,vegetables,andeggsaswellasarisein
the prices of butane gas cylinders. In the meantime, core CPI computed by the Central Bank of Egypt in
creasedby1.12percent(m/m)inMarchcomparedto0.52percent(m/m)inFebruarywhiletheannualrate
increasedto8.68percentinMarchfrom7.30percentinthepreviousmonth.Meanwhile,thepricesofpaid
services,otherservices,andretailitemsexperiencedmarginalincreases.1

Monthly Headline and Core CPI Inflation

(in percent )

Headline and Core CPI Inflation 1/

(year-on-year percentage change )

25.0

25.0

3.50
Headline CPI
3.00

Core CPI

20.0

20.0

15.0

15.0

10.0

10.0

2.50
2.00
1.50
1.00
0.50
5.0

0.00

Headline

-0.50

5.0

CPI - All Items (100%)

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

Core
0.0

Jan-12

Mar-12

Nov-11

Jul-11

Sep-11

May-11

Jan-11

Mar-11

Nov-10

Jul-10

Sep-10

May-10

Jan-10

Mar-10

Nov-09

Jul-09

Sep-09

May-09

Jan-09

Mar-09

Nov-08

Jul-08

Sep-08

Mar-08

0.0
May-08

Mar-12

Jan-12

Feb-12

Dec-11

Oct-11

Nov-11

Sep-11

Jul-11

Aug-11

Jun-11

Apr-11

May-11

Mar-11

Jan-11

Feb-11

Dec-10

Oct-10

Nov-10

Sep-10

Jul-10

Aug-10

Jun-10

Apr-10

May-10

Mar-10

-1.00

Source: CAPMAS and the CBE

Source: CAPMAS and the CBE

1.HeadlineCPI2

Core CPI

0.3
2.1

1.0
0.2

0.5
0.0

0.5 0.5 0.4

0.3

0.2

0.5

1.5

0.1

0.2

0.2

0.6
0.6

0.5

0.5 0.5

0.2
0.7

0.9 0.9 0.8

0.4 0.3
-0.2
-0.4

0.2

0.8

0.4 0.4

0.3
-0.2

-0.4

-0.9

-0.5

-1.3

-1.0
Mar-12

Feb-12

Jan-12

Dec-11

Nov-11

Oct-11

Sep-11

Jul-11

Aug-11

Jun-11

May-11

Apr-11

Mar-11

Jan-11

Feb-11

Dec-10

Nov-10

Oct-10

Sep-10

Aug-10

-1.5

Source: CBE

Contributions to Annual Headline CPI Inflation

(in percent)
Fruits & Vegetables

16.0

Regulated Items
Core CPI
12.0

0.7

1.5

1.1

Jul-10

6.2

8.0

5.7

4.9 5.0

4.2

1.9 1.8 3.4

2.9 3.5 3.2 1.8 1.3
1.8

1.8 1.8

1.7

1.8 1.6 1.8

1.1 1.1 1.1 1.1 1.7

4.0
4.9 4.6 4.6 4.6 4.8

3.7 3.2 2.8

2.3
0.9
2.2
2.0 2.5
2.3
1.7 1.0
2.0
1.8 1.8 2.1
1.7
1.9
1.4
1.2 1.9 1.8 1.6 1.6
1.6

7.2 7.3 7.1

6.4 6.5 6.6 6.7 6.4
6.3
6.2 5.7 6.0 6.6
5.1 5.8 5.5 5.2 5.2 5.1 5.4

Mar-12

Feb-12

Jan-12

Dec-11

Nov-11

Oct-11

Sep-11

Aug-11

Jul-11

Jun-11

May-11

Apr-11

Mar-11

Feb-11

Jan-11

Dec-10

Nov-10

Oct-10

Sep-10

Jul-10

Jun-10

Apr-10

May-10

Mar-10

0.0
Aug-10

Regulated Items

0.8

1.5

Jun-10

KeyHighlights
Regulated prices increased by 1.05 percent
(m/m) in March to contribute by 0.19 percent
age points to monthly headline inflation. This
monthlydevelopmentmainlycameontheback
ofa21.10percent(m/m)increaseintheprices
of butane gas cylinder, bringing the cumulative
monthlyincreaseto150.36percentsinceJanu
ary2011.
Prices of both fresh vegetables and fresh fruits
increasedforthesecondconsecutivemonthby
1.80percent(m/m)and4.16percent(m/m)re
spectively. The rise in fruit prices in February
and March follows eight consecutive monthly
declines. Together, fresh fruits and vegetables
contributed by 0.22 percentage points to
monthlyheadlineinflation.

0.4

2.0

May-10

2.5

Apr-10

Headline CPI increased by 1.22 percent (m/m) in

March compared to 0.67 percent (m/m) in Febru
ary,whichishigherthantheaveragemonthlypace
of 0.76 recorded during 2011. The annual rate de
clinedto9.03percentinMarchfrom9.19percentin
the previous month, supported by favorable base
effectsfromlastyear.

Contributions to Monthly Headline CPI Inflation

(in percent)
Fruits & Vegetables

3.0

Mar-10

Source: CBE

CentralBankofEgypt
MonthlyInflationDevelopments

Poultry prices continued to accelerate increas

ingby7.93percent(m/m)inMarchfollowinga
9.43percent(m/m)riseinFebruary.Thecumu
lative monthly increase in poultry prices over
the last four months is 24.04 percent. This
month'sincreasecomesinsharpcontrasttothe
averagemonthlypaceof0.62percentrecorded
during2011,partlyreflectingthetentativesub
stitution effect resulting from the outbreak of
foot and mouth disease in cattle. Higher poul
trypricescontributedby0.34percentagepoints
tomonthlyheadlineinflation.

Prices of fish and seafood accelerated by 6.47

percent (m/m) in March, to record the largest
monthlyincreasesinceFebruary2004.Thisfol
lows a marginal 0.31 percent (m/m) rise in the
previousmonthandlieswellabovetheaverage
monthly pace of 0.91 percent (m/m) recorded
during2011,partlyreflectingthetentativesub
stitution effect resulting from the outbreak of
footandmouthdiseaseincattle.

2.CoreInflation2

CoreCPIincreasedby1.12percent(m/m)inMarch
compared to 0.52 percent (m/m) in February. This
monthsincreaseiswellabovetheaveragemonthly
pace of 0.57 percent (m/m) recorded during 2011.
This led annual core inflation to increase to 8.68
percent(m/m)inMarchfrom7.30percent(m/m)in
thepreviousmonth.

The bulk of the monthly increase in March was

driven by the higher food prices mentioned above
which contributed by 0.84 percentage points to
monthly core inflation. The remaining portion is
accountedforbytheinchupinthepricesofother
servicesandtoalesserextent,retailpricesandpaid
services.

Contributions to Monthly Core CPI Inflation 1/

(in percent)

3.5

Other Services
Paid Services
Retail Prices
Poultry & Red Meat
Food Prices excl. Poultry & Red Meat

3.0
2.5
2.0

1.4

1.5

1.0
0.5
0.0

1.3

0.2

0.5 0.5 0.2

0.2

0.5

0.5

0.4 0.3 0.4 0.2 0.4

-0.2
-0.4
-0.5

0.7

0.3 0.5

0.3 0.5

0.7 0.7

0.1

0.4

-0.5

Mar-12

Jan-12

Feb-12

Dec-11

Oct-11

Nov-11

Sep-11

Jul-11

Aug-11

Jun-11

Apr-11

May-11

Mar-11

Jan-11

Feb-11

Dec-10

Oct-10

Nov-10

Sep-10

Jul-10

Aug-10

Jun-10

Apr-10

May-10

Source: CBE

Contributions to Annual Core CPI Inflation

(in percent)
14.0

Prices of other food items, including processed

vegetables and rice, increased marginally in
March, contributing by 0.02 percentage points
to monthly headline inflation. Meanwhile,
prices of imported butter fell by 3.06 percent
(m/m)inMarch,thefirstdeclinesinceOctober
2010.

Other Services
Paid Services
Retail Prices
Poultry & Red Meat Prices
Food Prices excl. Poultry and Red Meat

12.0
10.0
8.0
6.0

4.6

4.0
2.0

4.2

3.4 3.8 3.9 3.9 4.6

4.0

2.3 2.1 1.8 1.3

4.2 4.0 3.7 2.6
0.7

4.0

2.3 2.1 2.1 2.0 1.9 2.8 2.7 2.0

2.6

0.6 0.9

4.5 4.5 4.9 5.0 4.5

3.8 3.9 3.4
3.6 3.7 3.9
3.2 2.9 2.8 2.8
2.8 3.2

Mar-12

Feb-12

Jan-12

Dec-11

Nov-11

Oct-11

Sep-11

Aug-11

Jul-11

Jun-11

May-11

Apr-11

Mar-11

Feb-11

Jan-11

Dec-10

Nov-10

Oct-10

Sep-10

Aug-10

Jul-10

Jun-10

May-10

0.0
Mar-10

Prices of other services increased by 0.64 per

cent (m/m) in March after remaining un
changed in the previous month. This came on
the back of higher prices of inland transporta
tion, restaurant meals, mobile phone services,
and Haj & Omra trips which together contrib
uted by 0.13 percentage points to monthly
headlineinflation.

0.3 0.4

-1.0

0.6

1.2

-0.5

0.9

Mar-10

Egg prices increased by 4.31 percent (m/m) in

March following a 4.43 percent (m/m) rise in
the previous month, contributing by 0.07 per
centage points to monthly headline inflation.
Thecumulative15.06increaseineggpriceswit
nessed in the first three months of 2012 lies
well above the cumulative 9.85 percent in
creasein2011.

Apr-10

Source: CBE

1/ CAPMAS publishes three CPI series: (1) the CPI for urban
areas which include Cairo, Alexandria, urban Lower Egypt, ur
banUpperEgypt,CanalcitiesandFrontiergovernorates,(2)the
CPI for rural areas, and (3) the CPI for All areas. Numbers
quotedinthisnoterefertoCPIUrban.

Paid services inched up by 0.65 percent (m/m)

onthebackofa5.81percent(m/m)riseinthe
prices of maintenance services. Meanwhile re
tail prices recorded a modest inch up of 0.29
percent (m/m) in March following a 0.61 per
cent(m/m)declineinthepreviousmonth.

2/ It is important to underscore that the monthly percentage

changes of both headline and core CPI between September
2009andJuly2010donotmatchratesofchangespresentedin
th
previous inflation notes given the replacement of the 8 CPI
th
series by the 9 series starting from August 2009 (Full details
are discussed in the Technical Appendix of the August 2010
InflationNote).

CentralBankofEgypt
MonthlyInflationDevelopments

Table1.
ClassificationofAllItemsincludedinCoreCPI
Food
Bread and cereals
Meat
Fish and other seafood
Eggs & Dairy products
Oils and fats

Retail
Clothing
Fabrics
Footwear
Products related to dwelling repairement
Furniture

Paid Services
Tailors, laundry & shoe repair
Dwelling maintenance services
Portman & gardener's services
Cook & maid's services
Technicians to HH appliances

Other Services
Rentals (new law)
Rental value of owner occupied housing
Hospital services
Transportation Services
Mobile & internet services

Dried fruits

Carpets and other floor covering

Repairs of Audio-visual equipment

Recreational & sporting services

Processed vegetables
Pulses
Sugar and confectionery
Other food products
Beverages

Household (HH) textiles

HH appliances
Glassware, tableware and HH utensils
HH small tools & supplies
HH cleaning products
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

Physicians
Mechanics
Teachers
Hairdressers

Cultural services
Hajj & Omra trips
Restaurants and Cafes
Accommodation services
Private schools

CentralBankofEgypt
MonthlyInflationDevelopments

Table2.
ConsumerPriceIndexandMajorComponents1/

Weight in
basket 2/
(in percent)

March 2011

March 2012

(index)

March 2012 to
February 2012

March 2012 to
March 2011

(percentage change)

(January 2010 = 100)

Headline - All items

100.00

112.45

122.60

1.22

9.03

39.92

123.18

136.66

1.86

10.94

Tobacco and related products

2.19

146.89

201.78

0.00

37.37

Clothing and footwear

Food and beverages

5.41

100.08

106.84

0.76

6.75

Housing, water, electricity, gas and other

fuels

18.37

99.48

109.64

1.10

10.21

Furnishings, household equipment and

routine maintenance of the dwelling

3.77

103.67

110.62

0.26

6.71

Medical care

6.33

101.77

102.05

0.00

0.28

Transportation

5.68

101.51

104.50

2.00

2.94

Communications

3.12

100.03

95.53

0.69

-4.50

Recreation and Culture

2.43

106.93

115.57

0.39

8.08

Education

4.63

124.31

136.59

0.00

9.88

Hotels, cafes and restaurants

4.43

112.37

115.54

1.31

2.82

Miscellaneous goods and services

3.73

102.08

104.97

-0.15

2.83

6.90

151.86

166.09

2.33

9.37

Regulated items

18.66

108.88

120.04

1.05

10.26

Food excl. fruits & vegetables

31.08

118.07

132.22

1.82

11.98

Retail items

14.48

102.25

107.35

0.29

5.00

Paid services

5.87

109.55

117.34

0.65

7.12

Other services

23.00

103.07

109.54

0.64

6.28

Core CPI

74.43

109.68

119.20

1.12

8.68

Selective aggregates
Fruits & vegetables 3/

1/ Source: CAPMAS and CBE calculations

2/ Based on 2008/2009 Household Expenditure Survey
3/ Excluding pulses, processed vegetables and dried fruits