In July, consumer prices increased 0.7% over the previous month, which contrasted the 0.7% decline recorded in June. According to the Central Agency for Public Mobilization and Statistics, the increase was mainly driven by higher prices for housing and utilities.
Inflation declined from 11.4% in June to 8.4% in July, which marked the lowest level since June of last year. The lower result reflects a base effect due to the jump in inflation last July when the government cut energy subsidies. The cut in energy subsidies was part of an ongoing fiscal reform program designed to reduce the large fiscal deficit. Moreover, annual average inflation decreased from 11.0% in June to 10.8% in July. Core consumer prices, which exclude volatile items such as fresh fruit and vegetables, rose 6.5% over the same month last year, which was well below the 8.1% increase seen in the previous month.
FocusEconomics Consensus Forecast participants expect inflation to average 10.0% in calendar year 2015, which is down 0.2 percentage points from last month’s projection. For calendar year 2016, the panel sees average inflation decreasing to 9.3%.
