Central Bank of Egypt
Monthly Inflation Developments
Headline and Core Inflation – December 2014
Headline CPI published by the Central Agency for Public Mobilization and Statistics on January 8, 2015, declined
by 0.07 percent (m/m) in December compared to a decline of 1.53 percent (m/m) in November. The annual rate
increased to 10.13 percent in December from 9.09 percent in November, on the back of the unfavorable base effect from last year. The bulk of the monthly developments was explained by the deceleration in the prices of fresh
vegetables and fruits. Which was partially offset by a sporadic increase in the prices of other food items. Meanwhile, core CPI computed by the Central Bank of Egypt, increased by 0.30 percent (m/m) in December compared
to a decline of 0.15 percent (m/m) in November. The annual rate declined to 7.69 percent in December compared to 7.81 percent in November. Additionally, while the prices of retail items and paid services increased marginally, prices of other services remained unchanged1.
1. Headline CPI2
Headline CPI decreased by 0.07 percent (m/m) in
December compared to a decrease of 1.53 percent
(m/m) in November, which came below the monthly average of 0.90 percent recorded during the first
eleven months of 2014. Meanwhile, the annual rate
increased to record 10.13 percent in December,
compared to 9.09 percent in November, on the
back of the unfavorable base effect from last year.
Key Highlights
 The prices of fresh vegetables decelerated by
3.55 percent (m/m) in December, while the
prices of fresh fruits decreased by 0.68 percent
in December. Together, the prices of fruits and
vegetables contributed by negative 0.31 percentage points to monthly headline inflation.

While the prices of poultry increased by 2.68
percent in December to contribute by 0.13 percentage points to monthly headline inflation,
the prices of red meat remained unchanged.
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Central Bank of Egypt
Monthly Inflation Developments

The prices of fish and seafood increased by 1.67
percent (m/m) in December, contributing by
0.05 percentage points to monthly headline inflation.

Moreover, the prices of eggs decreased by 1.64
percent (m/m) in December to contribute by
negative 0.03 percentage points to monthly
headline inflation.

While the prices of a number of other food
items increased, namely sweets, processed vegetables; the prices of other food products decreased, primarily imported butter, to collectively contribute by 0.02 percentage points to
monthly headline inflation.

Prices of regulated items increased by 0.18 percent (m/m) in December to contribute by 0.03
percentage points to monthly headline inflation. This came on the back of the inch up in the
prices of newspapers and magazines by 44.66
percent (m/m).

The prices of retail items increased marginally
by 0.48 percent (m/m) in December, which was
driven primarily by the increase in the prices of
HH miscellaneous products and personal care
products this added 0.02 percentage points to
monthly headline inflation.

The prices of paid services increased marginally
by 0.42 percent (m/m) in December, which was
driven by the increase in the prices of tailoring,
laundering and shoe repair to contribute by
0.03 percentage points to monthly headline inflation.

Meanwhile, the prices of other services remained unchanged, as the increase in the prices
of restaurant services, was offset by the decline
in the prices of Haj and Omra trips.
2. Core Inflation2
Core CPI computed by the Central Bank of Egypt,
increased by 0.30 percent (m/m) in December compared to a decrease of 0.15 percent (m/m) in November. The annual rate declined to 7.69 percent in
December, from 7.81 percent in November.
negative 0.23 percentage points to monthly core
inflation. In addition to the increase in retail prices
and paid services contributed by 0.07 percentage
points to monthly core inflation.
1/ 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.
2/ 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).
The monthly dynamics in December was mainly
driven by the developments in the prices of the previously mentioned food items, which contributed by
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Central Bank of Egypt
Monthly Inflation Developments
Table 1.
Classification of All Items included in Core CPI
Food
Retail
Paid Services
Other Services
Bread and cereals
Meat
Fish and other seafood
Eggs & Dairy products
Oils and fats
Clothing
Fabrics
Footwear
Products related to dwelling repairement
Furniture
Tailors, laundry & shoe repair
Dwelling maintenance services
Portman & gardener's services
Cook & maid's services
Technicians to HH appliances
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
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Central Bank of Egypt
Monthly Inflation Developments
Table 2.
Consumer Price Index and Major Components 1/
Weight in
basket 2/
(in percent)
December
2013
December
2014
(index)
December
December
2014 to
2014 to
November
December 2013
2014
(percentage change)
(January 2010 = 100)
100.00
140.40
154.62
-0.07
10.13
39.92
163.41
177.14
-0.33
8.40
Tobacco and related products
2.19
218.43
283.73
0.00
29.90
Clothing and footwear
Housing, water, electricity, gas and
other fuels
5.41
116.06
119.00
0.61
2.53
18.37
115.98
121.32
0.00
4.61
Furnishings, household equipment and
routine maintenance of the dwelling
3.77
130.91
137.75
0.47
5.23
Medical care
6.33
114.83
131.17
0.00
14.23
Transportation
5.68
112.75
137.51
0.00
21.96
Communications
3.12
95.36
96.85
-0.07
1.56
Recreation and Culture
2.43
145.63
162.83
0.58
11.81
Education
4.63
157.94
196.93
0.00
24.68
Hotels, cafes and restaurants
4.43
145.75
167.91
0.33
15.20
Miscellaneous goods and services
3.73
105.21
111.12
0.32
5.62
6.90
204.14
231.08
-2.96
13.20
Regulated items
18.66
133.11
157.53
0.18
18.35
Food excl. fruits & vegetables
31.08
158.12
169.76
0.48
7.37
Retail items
14.48
118.28
123.57
0.20
4.47
Paid services
5.87
132.46
156.68
0.42
18.28
Other services
23.00
119.21
127.89
-0.01
7.28
Core CPI
74.43
136.32
146.80
0.30
7.69
Headline - All items
Food and beverages
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
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