Annual headline inflation falls to 27.4% as urban inflation reaches lowest level since Jan 2023

Cairo – June 10, 2024: The annual headline inflation rate for Egypt witnessed a significant fall in May 2024, declining to 27.40 percent from 31.80 percent in April, according to recent data released by the Central Agency for Public Mobilization and Statistics (CAPMAS).

Egypt’s headline inflation has maintained a downtrend for the past few months, with April recording a 1.30 percent decrease in the annual headline inflation rate from 33.10 percent in March.

CAPMAS data revealed that May inflation was primarily fueled by a 28.90 percent year-on-year (YoY) increase in the food and beverage sector, driven by a 26.60 percent YoY uptick in meat and poultry prices.

Urban inflation showed a sharp decline in May compared to April’s 32.5 percent, dropping to 28.1 percent, the lowest level since January 2023 when it recorded 25.8 percent.

The slowdown was attributed to a 3 percent monthly decline in food and beverage prices, the largest component of the inflation basket.

Breaking down the inflation data, the statistics agency highlighted various increases in price across different groups.

Grains and bread prices rose by 15.3 percent annually, while meat and poultry prices increased by 26.2 percent. Dairy, cheese, and eggs saw a significant spike of 38.6 percent, while fruits and vegetables rose by 57.3 percent and 31.9 percent, respectively. Sugar and sugary foods increased by 31.2 percent, and coffee, tea, and cocoa surged by 41.4 percent.

Egypt’s significant downtrend of inflation rates has defied economists’ estimates stemming from concerns related to the Egyptian pound’s devaluation.

As part of efforts to curb inflation, Egypt recently implemented a 300 percent hike in subsidized bread costs effective from June 1.

The Central Bank of Egypt had previously raised interest rates by 6 percent in March, aiming to control inflation following the devaluation of the pound's exchange rate against the dollar.

Looking ahead, the Central Bank aims to achieve an inflation rate averaging 7 percent (± 2 percentage points) during the fourth quarter of 2024.