Egypt’s headline inflation is expected to have eased to 11.7% in January from 12.3% in December, according to a Reuters poll conducted on Thursday. Analysts attribute the slowdown to a favourable base effect and cooling food prices.
The median forecast for annual headline urban consumer inflation was calculated from a survey of 18 analysts conducted between January 29 and February 5.
“A stronger pound, easing transport and food inflation will be the primary drivers of the slowdown in Egypt’s inflation rate,” said James Swanston of Capital Economics.
Annual inflation has dropped significantly from a record high of 38% in September 2023, aided by an $8 billion financial support package signed with the IMF in March 2024.
“A relatively favourable base effect in January is expected to show up in the January 2026 figure, cushioning an expected rise in the food and beverage item,” added Esraa Ahmed of investment firm Thndr.
Don’t Miss This:
Egypt Says It Paid $5 Billion To Foreign Oil Partners, Targets Arrears Reduction
Five analysts also shared predictions for core inflation, which excludes volatile items such as certain food and fuel products, projecting it would decline slightly to a median 11.5% from 11.8% in December.
Growth in the money supply has contributed to inflationary pressures. M2 money supply growth accelerated to an annual 20.5% in December, up from 20.14% in November, after slowing from a peak of 31.5% in January 2023, according to central bank data.
The easing inflation allowed the central bank to cut its overnight lending rate by 100 basis points to 21.00% in December, bringing the total reductions in 2025 to 725 points.
Egypt’s central bank monetary policy committee is next scheduled to review overnight interest rates on February 12. The state statistics agency Capmas is expected to release the official January inflation figures on Tuesday.
Don’t Miss This:
Egypt Secures 1 Billion Euros From EU As Part Of Assistance Package
Image Credit: Reuters
