What is the difference between headline inflation and core inflation?

Inflation measures how much more expensive a set of goods and services has become over a certain period. Inflation is typically a broad measure, such as the overall increase in prices or the increase in the cost of living in a country.

There are two types of inflation measure in Egypt, the first is announced by the Central Agency for Public Mobilization and Statistics and is called headline inflation and the second is generated by The Central Bank of Egypt and is called core inflation rate

What is the difference between headline inflation and core inflation?

The difference mainly attributed to the method of calculation, where the Central Agency for Public Mobilization and Statistics calculates the headline inflation rate by measuring the change in the prices of a basket containing about 1000 goods and services such as (vegetables, meat, grains, electricity prices,…etc).

While core inflation is being calculated after excluding two types of goods and services from the basket that are subject to measurement in headline inflation. The two types are: commodities whose prices are set administratively, i.e. by the government, such as electricity, water and gas and commodities whose prices are highly volatile, specifically vegetables and fruits.

The Central Bank of Egypt and the Central Agency for Public Mobilization and Statistics announce inflation figures on the tenth day of every month.

The CBE is mainly responsible for controlling the inflation rates to keep it at acceptable levels using its monetary policy tools, the most important of which are interest rates, open market operations, and the mandatory reserve ratio.