Inflation in Egypt declined to 8.5 percent year-on-year in June from around 10 percent in May, bringing Cairo closer to meeting an 8 percent inflation target, Egypt's state news agency MENA said on Saturday.
The government of Prime Minister Ahmed Nazif said over a month ago that Egypt hoped to hit 8 percent inflation by July or August, and the central bank has repeatedly said consumer inflation may have peaked in March at 12.8 percent.
MENA quoted State Minister for Economic Development Osman Mohamed Osman as attributing the inflation decline to a dramatic slowdown in food and beverage price increases, which dropped to 9.6 percent in June from 16.7 percent in the year to March.
Egypt has blamed price rises on bird flu, fuel price increases and strong demand for building materials driven by economic growth. Egypt's central bank and a government report have put the inflation rate in the year to May at 10 percent, although Osman had earlier said inflation was 10.5 percent in that period.
The central bank, citing inflation declines, announced on Friday that it was keeping overnight corridor interest rates unchanged at 8.75 percent for deposits and 10.75 percent for lending to banks.