Egypt’s annual inflation fell to 12.5 percent in February 2025 from 23.2 percent in January, data from statistics agency CAPMAS showed on Monday. The monthly inflation rate recorded 1.4 percent last month compared to 1.6 percent in January 2025.
CAPMAS attributed this decline to a decrease in vegetable prices by 8.2 percent; coffee, tea and cocoa by 0.2 percent; and goods and services used in home maintenance by 0.1 percent. Despite the notable price decline in some areas, Egypt witnessed a rise in prices of cereals and bread, meat and poultry, fish and seafood and house rents, among others.
Egypt keep interest rates steady in Febraury
Inflation in Egypt had been climbing since early 2022 following the Russian invasion of Ukraine, which pushed foreign investors to withdraw billions of dollars from Egyptian treasury markets. Headline inflation reached a record high of 38 percent in September 2023.
To restabilize its economy, Egypt sharply devalued its currency, raised interest rates by 600 basis points, and signed an $8 billion financial support package with the International Monetary Fund.
Last month, Egypt’s central bank decided to keep its key overnight interest rates unchanged, citing the impact of uncertainty surrounding U.S. protectionism and geopolitics on inflation. The central bank decided to maintain the overnight deposit rate, overnight lending rate and the rate of the main operation at 27.25 percent, 28.25 percent, and 27.75 percent, respectively. The committee also decided to maintain the discount rate at 27.75 percent.
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Inflation to decline substantially in Q1 2025
Inflation in Egypt experienced a slower pace of deceleration throughout the second half of 2024 compared to the first half, stabilizing at 23.2 percent in January 2025. Annual core inflation remained broadly stable in Q4 2024, recording 22.6 percent in January 2025. Headline inflation climbed to a record high in September 2023 after falling to 26.5 percent in October 2024.
“Headline inflation is expected to decline substantially in Q1 2025, driven by the cumulative impact of monetary policy tightening and the favorable base effect. This downward trajectory will continue during 2025, albeit at a slower pace given the expected drag effect from the fiscal measures aimed at tightening the fiscal stance,” stated the central bank in its latest monetary policy announcement.
The central bank’s next policy meeting is scheduled for April 17.
