UPDATE 2-Egypt's consumer inflation jumps to 10.6 pct in July

Sun Aug 10, 2014 1:10pm BST

(Adds core inflation figure)

CAIRO Aug 10 (Reuters) - Egypt's annual urban consumer inflation jumped to 10.6 percent in July from 8.2 percent in June, the official statistics agency CAPMAS said on Sunday, after the government introduced a fuel price increase last month.

Egypt's economy has been in turmoil since a popular uprising ousted autocrat Hosni Mubarak in 2011, deterring tourists and foreign investors and straining the country's finances and foreign reserves.

Annual core inflation, which strips out subsidised goods and volatile items such as fruit and vegetables, rose to 9.35 percent in July from 8.76 percent in June, the central bank said in a statement later on Sunday.

Annual inflation reached its highest rate in nearly four years in November but has been falling back since then. Analysts expect it to rise again after the government raised energy prices by up to 78 percent in an effort to ease its budget deficit.

Gas subsidies were also cut, lifting prices by 30 to 75 percent, and sales taxes on alcohol and cigarettes rose as well in July.

CAPMAS head Abu Bakr al-Gindy said last month he expected inflation to rise in July due to the price increases but that the effect would plateau after July.

Despite billions of dollars in aid from Gulf states and two stimulus packages, economic recovery in the most populous Arab nation has been slow. (Reporting by Asma Alsharif; Editing by Robert Birsel, Larry King)

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