CAIRO: Annual inflation declined in 1.9 percent, from 11.69 percent in January to 9.70 percent in February, according to the Consumer Price Index (CPI) of the Central Bank of Egypt (CBE) on Monday.
The monthly rate decreased 0.09 percent, from 1.11 percent in January to 1.02 percent in February, due to favorable base effect from last year, the bank reported.
On the other hand, the CPI at the Central Agency for Public Mobilization and Statistics said that the annual rate decreased to 9.76 percent in February from 11.36 percent in January, while the monthly inflation rate valued 1.03 percent, compared to 1.42 percent in January, CBE announced.
Commenting on whether the CBE report was a positive index for the economy, former Head of Al Watany Bank, Ahmed Qura, said the rate of inflation depends on the price of goods and services for consumers.
“The decline in inflation doesn’t mean a recovery in economy,” Qura told The Cairo Post. “We cannot judge the economy on the CBE’s performance as it is too far to affect in economy.”
The CPI computes different categories of goods and services over consumers’ expenditure to count the inflation rate, Qura said.
Central banks are considered governmental tools to provide needed state expenses to regulate the private banks’ working in the country and to form monetary policy, Qura added.
Qura, criticizing the CBE’s intervention in economic affairs, said “the CBE should only work on monetary policy and shouldn’t intervene in economic affairs,” referring to the Feb. 19 initiative by the CBE to pump 10 billion EGP ($1.43 billion) into the mortgage sector.
On the Egyptian economy case, Qura recommended that the interim government, headed by Ibrahim Mahlab, apply austerity plans to decline the budget deficit.
Austerity plans could begin by decreasing governmental and consumption expenses and increasing financial revenues by attracting new investments, Qura said.