Egypt Inflation Accelerates to 14.9 Percent in July

Egypt’s annual urban consumer price inflation accelerated to 14.9% in July from 14.3% in June, marking the first increase in four months.

Data from Egypt’s state statistics agency, CAPMAS, showed the July reading was also above the 14.6% recorded in May. The acceleration came as price pressures increased across key components of the consumer basket, particularly food and beverages.

Food and beverage inflation rose sharply to 8.0% in July from 5.4% in June, reaching its highest level in 14 months. The increase was a major contributor to the broader rise in consumer prices and reversed some of the progress made in recent months.

The July inflation rate was below the 15.6% median forecast from a Reuters poll of analysts, suggesting that price pressures were more subdued than economists had expected. Forecasts had ranged between 14.6% and 16.3%.

On a monthly basis, urban consumer prices increased by 1.2% in July, compared with a 1.1% increase in June. The acceleration added to concerns that inflation could remain elevated through the third quarter before potentially easing later in the year.

Egypt has been implementing a series of economic reforms under an $8 billion International Monetary Fund support programme, including currency reforms and reductions in government subsidies. These measures have contributed to substantial price increases while helping the country address longstanding foreign exchange and fiscal pressures.

Electricity prices also increased by about 12% at the beginning of August, meaning utility costs could add further pressure to inflation in the coming months. The government has been gradually reducing energy subsidies as part of its broader fiscal reform programme.

Despite the renewed increase, inflation remains significantly below the record levels experienced during Egypt’s economic crisis. Annual inflation reached about 38% in September 2023 following severe currency shortages, multiple devaluations and rising import costs.

The latest figures will be closely watched by the Central Bank of Egypt as policymakers balance inflation control against the need to support economic growth. The central bank has cut interest rates as inflation moderated, but renewed price pressures could limit the scope for further monetary easing.

Economists expect the annual inflation rate to remain elevated in the near term before base effects and improving supply conditions potentially help bring it lower towards the end of 2026.

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