9/1/2025–|Last updated: 1/9/202510:18 PM (Mecca time)
Annual consumer price inflation in Egyptian cities fell to 24.1% last December from 25.5% the previous November, which is the lowest level in two years, in light of the continued decline in food prices, according to a report.Data provided by the Central Agency for Public Mobilization and Statistics in Egypt.
On a monthly basis, prices in Egyptian cities rose by 0.2% compared to 0.5% in November.
Food prices fell 1.5% in December after falling 2.8% in November, making them 20.3% higher than they were a year ago.
Data from the central bank later on Thursday showed that core inflation fell to 23.2% on an annual basis in December from 23.7% in November.
Core inflation excludes highly volatile commodities such as food prices.
And he expected Analyst at I Pace Consulting I expect the downward trend to continue during the current and next years, at between 5% and 6% on average for each.
He said that this would allow the Central Bank to begin reducing interest rates during the first quarter of this year, expecting them to decline by between 7 and 9 percent.
He added that current data indicate that inflation will not reach the range targeted by the Central Bank during the current year, and this may not be achieved until late next year.
Inflation rose in August, September and October, but fell in November, remaining well below the all-time high of 38% reached in September 2023.
The rapid growth in Egypt’s money supply helped increase inflation.
Central Bank data showed that the money supply (M2) grew by 29.06% in the year ending at the end of November, which is slightly less than the all-time high of 29.59% recorded in the year ending at the end of September.
peak inflation
Inflation began to rise sharply in 2022 following the Russian war on Ukraine, which prompted foreign investors to withdraw billions of dollars from Egyptian treasury markets.
Inflation peaked at 38% in September 2023, and its lowest level since then was 21.27% in December 2022.
Last March, Egypt signed an $8 billion financial support package with the International Monetary Fund with the aim of helping it reduce the budget deficit and adopt a monetary policy that is less stimulating to inflation. But the package obligates the government to reduce subsidies on some local goods, which leads to an increase in their prices.
Inflation rates are among the most important points that the Monetary Policy Committee of the Central Bank of Egypt takes into account when it meets to make interest rate decisions.
The committee expects this trend to continue, as it said in the minutes of its last meeting in 2024, “Expectations indicate that inflation will decline significantly starting from the first quarter of 2025, with the cumulative impact of monetary tightening decisions and the positive impact of the base period being achieved, and it will approach recording single digits by half.” The second of the year 2026.
The committee had fixed interest rates in its last six meetings, as it had not changed them since it raised them by 600 basis points in an extraordinary meeting last March as part of a loan agreement whose size increased to $8 billion with the International Monetary Fund. This increase in interest rates came after a 200 basis point increase on February 1.
