Egypt’s annual urban consumer price inflation showed a slight decline, easing to 24% in January from 24.1% in December, according to data from the Central Agency for Public Mobilization and Statistics (CAPMAS). Despite the drop, January’s inflation remains higher than the 23% median forecast by 17 analysts surveyed by Reuters last week.
The monthly report revealed a broad-based increase in prices, highlighting the continued strain on household budgets. Food and beverage prices surged by 20.2% year-on-year, while transport costs jumped 33.6%. The entertainment sector saw the sharpest rise, with a staggering 48% increase over the same period.
Egypt has faced soaring inflation since the early months of 2022, driven in large part by the economic ripple effects of the Russian invasion of Ukraine. The war exacerbated food and energy costs, and the country’s currency devaluation triggered a sharp decline in foreign investment. These factors have led to considerable challenges for the Egyptian economy, with the inflation rate reaching a record high of 38% in September 2023.
Since then, the inflation trajectory has shown signs of improvement. By October 2024, inflation had eased to 26.5%. January’s inflation report, while indicating some stabilization, reveals the persistent cost pressures on Egyptian consumers.
On a monthly basis, headline inflation rose by 1.6% in January, a notable uptick from December’s flat rate of 0%. The food and beverage sector contributed heavily to the increase, rising 2.1% month-on-month, while healthcare costs also saw a significant rise, up 4.6%.
Egypt’s inflationary pressures are expected to remain in focus as the country continues to recover from the combined challenges of geopolitical instability and internal economic reforms. Analysts will be closely monitoring the coming months to gauge the effectiveness of government measures aimed at curbing inflation and stabilizing the economy.
