Egypt's Urban Inflation Slows To 12% In August, Down From 13.9% In July

(MENAFN- Daily News Egypt) The Central Agency for Public Mobilization and Statistics (CAPMAS) announced that Egypt's annual urban inflation rate slowed to 12% in August 2025, compared to 13.9% in July. Nationwide inflation also decelerated, falling to 11.2% from 13.1% over the same period.

The Central Bank of Egypt (CBE) reported that monthly core inflation-which excludes volatile items such as food and energy-rose by just 0.1% in August, down from 0.9% in August 2024 and recovering from a negative 0.3% in July 2025. On an annual basis, core inflation dropped to 10.7% in August from 11.6% the previous month.

The CBE forecasts that headline inflation will average between 14 and 15% for the full year, in line with its decline to 15.2% in the second quarter of 2025, down from 16.5% in the first quarter.

In light of the easing inflationary trend, the CBE's Monetary Policy Committee decided on 28 August to cut key interest rates by 200 basis points. The overnight deposit rate now stands at 22%, the overnight lending rate at 23%, and both the credit and discount rate and the main operation rate at 22.5%.

According to the committee, the decision reflects its assessment of recent inflation developments and projections since its last meeting on 10 July. The CBE stated that demand-side inflationary pressures are expected to remain limited, supported by tight monetary policy and consistent with the short-term downward trend in inflation.

The bank reiterated its commitment to returning inflation to its target range of 7% (±2%) by the fourth quarter of 2026, and further to 5% (±2%) by the fourth quarter of 2028. However, it warned that inflation remains subject to upside risks, including changes in administratively set prices and rising geopolitical tensions in the region.

The CBE noted that the interest rate cut is consistent with maintaining a policy stance that anchors expectations and supports the anticipated disinflation path. It emphasized that the pace of monetary easing will be determined on a meeting-by-meeting basis, based on updated forecasts, economic data, and associated risks. The bank added that it will continue to closely monitor economic and financial conditions and use all available tools to ensure price stability and guide inflation toward its medium-term targets.

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