Egypt's annual inflation rate eased to 13 percent in May, down from 13.4 percent in the previous month, according to data released by the Central Agency for Public Mobilization and Statistics (CAPMAS). This marks a continuation of the gradual decline in price pressures as authorities implement economic reforms and maintain tight monetary policy.
Monthly Price Movements
The consumer price index rose by 1.4 percent month-on-month to reach 292 points in May. The food and beverages sector saw a notable increase of 2.1 percent, driven by higher prices in several categories:
- Cereals and bread: up 0.3 percent
- Meat and poultry: up 3.5 percent
- Fish and seafood: up 1.3 percent
- Oils and fats: up 0.5 percent
- Fruit: up 12.7 percent
However, some categories experienced declines, with dairy, cheese and egg prices falling by 1.8 percent.
Other Sector Changes
Alcoholic beverages and tobacco prices rose 0.2 percent, while clothing and footwear increased by 1.4 percent. Housing, water, electricity, gas and fuel costs climbed 2 percent. Furniture and household equipment expenses rose 1.2 percent. Healthcare prices edged up 0.2 percent, and transportation costs increased marginally by 0.1 percent. Telecommunications saw a significant rise of 9.7 percent, while recreation and culture costs went up 0.2 percent. Restaurant and hotel prices increased by 1.1 percent, and miscellaneous goods and services rose 0.8 percent.
Economic Outlook
The moderation in inflation comes as Egypt's economic outlook improves, supported by a series of reforms backed by an $8 billion International Monetary Fund support package agreed in March 2024. The Central Bank of Egypt forecasts economic growth of 4.3 to 4.5 percent in the current fiscal year, with average annual inflation expected to be around 12 percent.
Rating agencies have taken note of the improving macroeconomic conditions. In April, S&P Global affirmed Egypt's sovereign credit ratings at 'B/B' with a stable outlook, citing progress in economic reforms and stronger external buffers. The agency noted that the affirmation reflects a balance between Egypt's reform progress over the past two years, improving external buffers, and medium-term growth prospects, despite risks from prolonged regional geopolitical tensions.
