The Central Bank of Egypt (CBE) expects the annual inflation rate to accelerate until the third quarter of 2026, citing partly unfavorable base effects, supply-side pressures from the ongoing conflict, currency fluctuations, and fiscal adjustment measures.
According to the Monetary Policy Committee’s report, the annual inflation rate is projected to exceed the central bank’s target of 7% (±2 percentage points) on average during the final quarter of 2026. The report anticipates a gradual slowdown in inflation in the first quarter of 2027, with levels converging toward the target by the second half of the year.
The CBE highlighted that the projected inflation path will be supported by monetary tightening, ongoing assessment of inflationary pressures, regular monitoring of monthly inflation developments, anchoring inflation expectations, and a continued commitment to exchange rate flexibility.
The central bank also cautioned that inflation projections remain exposed to upward risks, including the possibility of a prolonged conflict and fiscal adjustments exceeding current expectations.
This forecast underscores the challenging economic environment facing Egypt, as policymakers balance inflation control, exchange rate stability, and fiscal consolidation amid global and regional uncertainties.
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