Annual inflation in consumer prices in cities in Egypt slowed to 28.1% last May, compared to 32.5% in the previous April, according to data from the Central Agency for Public Mobilization and Statistics.
A poll of 19 analysts expected annual inflation to decline to 30.4% on average. Food prices rose 31% in May year-on-year.
Inflation rates continued to slow for the third month in a row in May after a sudden jump in February.
On a monthly basis, prices fell 0.7% last May, while food prices fell 3%.
Inflation has been rising for a year now, largely influenced by rapid growth in the money supply.
Third review
This comes less than a week after Egypt and the International Monetary Fund reached a staff-level agreement on the third review of an expanded loan program, which will disburse about $820 million to Cairo after approval by the Fund’s Executive Board.
The loan was expanded last March to $8 billion, from $3 billion agreed upon in December 2022.
The IMF said in a statement that Egypt’s efforts to restore macroeconomic stability are making some progress, despite the difficult regional environment that is witnessing the repercussions of the war in Gaza and the disruption of shipping in the Red Sea, which has affected Suez Canal revenues.
“While geopolitical tensions and their impact on Egypt continue to be challenging, the authorities remain on track to maintain macroeconomic stability through fiscal discipline, tight monetary policy, and a shift to a flexible exchange rate regime,” said Vladkova Hollar, head of the mission, in a statement.
“These efforts are beginning to provide better forecasts and improved foreign currency availability, inflation is beginning to slow, and there are signs of recovery in private sector sentiment,” she added.
Hollar pointed out that Egypt needs to maintain prudent financial policies and a strict monetary policy to control inflation.
