Egypt’s annual urban consumer price inflation slowed to 12% in August, down from 13.9% in July, offering some relief to households after months of soaring costs.
The Central Agency for Public Mobilization and Statistics (CAPMAS) said the decline was largely driven by a slowdown in food and non-alcoholic beverage prices, which make up the largest component of the inflation basket. CAPMAS figures, cited by Reuters, showed that improved supply conditions and stabilising global commodity prices contributed to easing cost pressures.
Analysts told Bloomberg that the softer inflation print could strengthen the Central Bank of Egypt’s case for holding interest rates steady after a series of hikes aimed at anchoring prices and supporting the currency. However, they warned that structural pressures, including high import costs and a volatile exchange rate, remain risks to the outlook.
The slowdown follows a period of double-digit inflation that has squeezed household purchasing power and weighed heavily on businesses. Financial Times noted that the government has been relying on subsidy reforms, Gulf inflows, and foreign investment in infrastructure to balance fiscal pressures with consumer needs.
Economists suggest that if inflation continues to decelerate, it could bolster investor confidence and ease pressure on policymakers as Cairo prepares for further external financing talks with the International Monetary Fund.
