Egypt’s annual core inflation rate rose by 0.7 points in August to reach 25.1 percent from 24.4 percent in July, according to Central Bank of Egypt (CBE) figures released on Tuesday, 10 September.
Monthly core consumer price index (CPI) inflation also rose to 0.9 percent in August 2024, compared to -0.5 points in July 2024 and 0.3 points in August 2023, the CBE announced.
In line with this trend, the headline urban CPI also climbed by 2.1 percentage points in August, as reported by the Central Agency for Public Mobilization and Statistics (CAPMAS).
Accordingly, Egypt’s inflation rate accelerated following a reduction in fuel subsidies, breaking a five-month period of deceleration that had been paving the way for the first interest-rate cut since 2020.
The annual urban inflation rate reached 26.2 percent, up from 25.7 percent in July, driven primarily by a 1.8 percent increase in food prices last month, which had slowed to a mere 0.3 percent increase in July.
Despite a temporary decline in July when the annual core inflation rate dropped to 24.4 percent—its lowest level since December 2022—the overall inflationary pressures remain high.
Containing inflation and setting it on a downward trajectory remains a key priority under Egypt’s USD 8 billion (EGP 387 billion) loan program with the International Monetary Fund (IMF).
Initially, the CBE set a target inflation rate of seven percent (±2 percent). The central bank anticipates a decline in inflation by the first quarter of 2025 due to the accumulated effects of its monetary tightening measures. However, it has also warned that inflation may rise again due to factors such as regional geopolitical tensions, shrinking global oil supplies, and uncertainties surrounding protectionist trade policies.
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