Egypt’s Inflation Eases Slightly to 12.3%

Egypt’s urban inflation slowed mildly in November, offering the central bank some breathing room as it weighs its final interest-rate decision of the year. 

A softer rise in food and beverage costs, traditionally the heaviest component in the consumer basket, helped offset sharper increases in other categories, pulling headline inflation modestly lower.

Data released Wednesday by the Central Agency for Public Mobilization and Statistics (CAPMAS) showed annual urban consumer inflation easing to 12.3% in November, down from 12.5% the previous month. On a monthly basis, prices rose just 0.3%, a significant deceleration from 1.8% in October.

The cooling momentum follows a noticeable retreat in prices of essential commodities over the past month. Market sources told Asharq earlier that some staple goods saw declines of up to 80% amid improved production inputs, higher local output and a growing supply glut, all against the backdrop of subdued demand.

Egyptian officials have recently struck a more upbeat tone regarding price trends. Deputy Finance Minister Ahmed Kojak described current inflation readings as “good” and indicative of “stability,” speaking on the sidelines of the Cairo Economic Forum in November. He emphasized that employment indicators deserved at least as much attention as inflation figures.

Inflation reached a historic peak of 38% in September 2023 before beginning a steady retreat, helped in part by a major financial rescue package completed with the International Monetary Fund (IMF) in March 2024. The program has supported macroeconomic stabilization efforts and helped ease price pressures.

Against this backdrop, the Central Bank of Egypt (CBE) has shifted to a more accommodative stance in 2024, delivering four rate cuts that together exceeded 600 basis points.

At its most recent policy meeting in November, the CBE left rates unchanged, signalling that inflation may edge up again late in the fourth quarter due to recent energy price hikes. However, the bank expects inflation to resume its decline through the second half of 2026, moving closer to its target range.

Egypt raised fuel prices by up to 13% in October, the second increase this year, but intends to maintain price stability in the domestic fuel market for at least a year.

The Monetary Policy Committee is set to convene again on December 25, with the central bank’s key rates currently standing at 21% for deposits, 22% for lending and 21.5% for the main operation rate.

In an updated outlook issued in October, the CBE revised its inflation forecasts downward to 14% for 2025 and 10.5% for 2026, expecting a gradual and consistent deceleration toward its medium-term target of 5–9% by late next year.

Global organizations share much of the central bank’s optimism. The IMF’s October World Economic Outlook projected average inflation in Egypt’s current fiscal year, ending June 2025, to fall to 11.8%, nearly half the 20.4% recorded last year. The outlook underscores expectations of easing price pressures as the country continues implementing its stabilization and reform program.

With inflation still elevated but clearly losing steam, all eyes now turn to the CBE’s December meeting, where policymakers will weigh the recent cooling against lingering cost risks and global financial conditions. Whether the slowing trend opens the door to further monetary easing could shape Egypt’s economic trajectory well into 2025.