Egypt’s inflation rate is expected to drop to 10 percent by the end of June 2025, a new report said.
According to the investment banking company Goldman Sachs, this prediction is based on several factors, including the recent floating of the pound exchange rate, an enhanced agreement concluded with the IMF, and payments injected by the UAE as part of a deal to develop the Ras El-Hekma peninsula.
The annual inflation in Egypt hit a record high of 36 percent in February before declining in March. However, Goldman Sachs argues that financial adjustments on food and energy subsidies have raised uncertainty regarding the near-term outlook of inflation.
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However, the investment bank remains optimistic about Egypt’s inflation outlook in the medium-term, citing the declining inflation attributed to the narrowed gap between the official and parallel market exchange rates, the gradual reduction of supply chain bottlenecks, favorable effects of the base period, and constrained demand pressures against the backdrop of ongoing monetary policy and the government’s tightening of fiscal policy in the coming months.
Goldman Sachs has updated its forecast for Egypt’s inflation rate, predicting a slow to 29.8 percent on an annual basis in May from 32.6 percent in April. The bank also expects further price reductions in 2025 due to favorable effects of the base period, and notes that food prices largely stabilized in May.
On Monday, the Central Agency for Public Mobilization and Statistics (CAPMAS) reported that Egypt’s annual urban consumer price inflation declined to 28.1 percent in May from 32.5 percent in April. The agency said this marked the country’s third consecutive month of decline since inflation’s surprise increase in February.
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