Egypt’s Annual Inflation Rate Falls

Egypt’s annual urban consumer price inflation dropped to 29.8% in January from 33.7% in December, the state statistics agency said. According to data published by the Egyptian Central Agency for Public Mobilization and Statistics on its website, prices rose by 1.6% in January month-on-month, up from 1.4% in December.

Food prices climbed by 1.4%, down from 2.1% in December. In the year to January, food prices rose by 47.5%, down from 60.5% in the year to December. Capital Economics said that inflation in January was below its expectations of 34% and the average market expectation of 32.9%.

The research firm indicated that inflation is expected to continue to slow this year but added that the significant, looming devaluation of the currency means that inflation will remain at a high level for a more extended period.

The inflation rate is projected to remain higher than the range the Central Bank targets until mid-2025. The Central Bank is expected to raise interest rates again to rebuild its ability to combat inflation.

The London-based institution indicated that price pressures will remain relatively strong despite the slowdown in inflation for the fourth month in a row. According to Capital Economics, the upcoming agreement between Egypt and the International Monetary Fund will undoubtedly be accompanied by a significant devaluation of the currency, expecting a reduction in the exchange rate to 65 pounds to the dollar.