Egypt inflation hits record 23.1%

(AFP)

Inflation soared to a record 23.1 percent in Egypt in July, fuelled by skyrocketing food prices, the CAPMAS national statistics agency reported on Sunday.

The dramatic rise in the national consumer price index -- the highest jump in 16 years -- was mainly due to an increase of 32.5 percent year-on-year in food prices, CAPMAS said.

Egypt's inflation seemed under control until the start of the year, but began to surge in March due to the rising cost of foodstuffs on the world market, particularly for wheat, of which Egypt is a major importer. President Hosni Mubarak in May announced a 30 percent increase in civil servants' salaries, sparking a spiral of price increases in consumer products such as petrol and cigarettes.

In its report on July inflation, CAPMAS listed the most noticeable price increases as being 71.1 percent year-on-year for butter, 38.5 percent for dairy products, 39.1 percent for poultry and 32.8 percent for pasta.

For the fifth time this year, the Egyptian central bank last week raised by half a point its prime rates, to 11 percent for deposits and 13 percent for loans. While the rates increase is aimed at calming inflation, it could also have a negative effect on economic growth, which had been heading for a strong seven percent this year, economists warn.

Egypt population could more than double by 2050

Egypt's population could more than double to reach 160 million by 2050, hindering social and economic development unless something is done about the "urgent" problem, President Hosni Mubarak warned on Monday.

Mubarak, who has in the past blamed population growth for draining state resources amid rising discontent at rocketing food prices, said that rampant reproduction was a "major challenge" and "fundamental obstacle" to development.

Population growth is "a major challenge for this generation and the generations to come," Mubarak said on Egyptian state television, and a "key obstacle to our efforts for development and improving the standard of living."

AFP

Egypt, too choses nuclear

Egypt's president announced plans Monday to build several nuclear power plants — the latest in a string of ambitious such proposals from moderate Arab countries. The United States immediately welcomed the plan, in a sharp contrast to what it called nuclear "cheating" by Iran.

President Hosni Mubarak said the aim was to diversify Egypt's energy resources and preserve its oil and gas reserves for future generations. In a televised speech, he pledged Egypt would work with the U.N. nuclear watchdog agency at all times and would not seek a nuclear bomb. But Mubarak also made clear there were strategic reasons for the program, calling secure sources of energy "an integral part of Egypt's national security system."

In Washington, State Department spokesman Sean McCormack said the U.S. would not object to the program as long as Egypt adhered to the nuclear Non-Proliferation Treaty and International Atomic Energy Agency guidelines.

Jordan, Turkey and several Gulf Arab countries have announced in recent months that they are interested in developing nuclear power programs, and Yemen's government signed a deal with a U.S. company in September to build civilian nuclear plants over the next 10 years.

Algeria also signed a cooperation accord with the United States on civil nuclear energy in June, and Morocco announced a deal last week under which France will help develop nuclear reactors there.

AP

Egypt: Ban of Brotherhood Event

The Egyptian government has banned the Muslim Brotherhood's largest annual social gathering for the first time in 20 years, part of a concerted crackdown against the country's opposition, the group's leadership said Sunday.

Every year, the Brotherhood invites a diverse group of some 1,500 people to one of Cairo's five-star hotels for a gala dinner during Ramadan, the monthlong period when many Muslims fast from sunrise to sunset.

The Brotherhood, which was officially banned in 1954, is Egypt's largest opposition group. Its lawmakers, who run as independents, hold more than a fifth of the seats in the 454-member lower house of the parliament.

The ban of the banquet comes at a time of rising tension between Egyptian President Hosni Mubarak's government and those who question its leadership. Authorities have imprisoned hundreds of Brotherhood members in recent months and have begun a crackdown against dissenting voices within the media.

Analysts say the government's moves have been driven by uncertainty over who will become president after Mubarak, who has ruled Egypt for more than a quarter century but has no designated successor. Many in Egypt believe Mubarak's 43-year-old son Gamal is being groomed for the position, a prospect that has raised widespread opposition. "The escalation against the Brotherhood and the press reflects high volatility in the political scene due to a struggle within the institution over the transfer of power," said Diaa Rashwan, an Egyptian analyst with the Al-Ahram Center for Political and Strategic Studies.

The government has also targeted organizations unrelated to the transfer of power. Earlier Tuesday, authorities closed the Association for Human Rights Legal Aid, which had been involved in the first lawsuit against a state security officer for torture.