CAIRO: Central Bank of Egypt (CBE) Governor Farouk El-Okdah said on Monday he expected a further drop in the country s rate of inflation by the end of 2007. The inflation rate is now 8 percent and is expected to drop to 7 percent in August and under that by the end of the year, El-Okdah said in a news conference. This signals the success of our monetary policy. But El-Okdah said his projections did not take into account any possible cuts in energy subsidies. Egyptian Finance Minister Youssef Boutros Ghali said earlier this month that the government would announce fresh cuts in energy subsidies in the next three to four months but declined to say how big the cuts would be. If the government took this move, this will normally raise inflation above our projections, El-Okdah said. Economic Development Minister Osman Mohamed Osman had said earlier this month that inflation stood at 8.5 percent in June. The government of Prime Minister Ahmed Nazif has set 8 percent as its targeted inflation rate. The CBE has said inflation may have peaked in March at 12.8 percent. Egypt has blamed the price rises on bird flu, fuel price increases and strong demand for building material driven by economic growth.
