Inflation in Egypt has shown signs of easing, with the rate slowing down to 24.1% in December 2024 on an annual basis, compared to 25.5% in November. According to the Central Agency for Public Mobilization and Statistics (CAPMAS), this represents a positive development in Egypt’s ongoing battle with inflation, signaling some relief to consumers across the country.
Monthly Inflation Rate’s Encouraging Signs
On a monthly basis, the inflation rate for urban areas in Egypt decelerated to 0.2% in December 2024, down from 0.5% in November. This reflects a notable slowdown in the pace of price increases, marking a welcome shift after several months of persistent inflationary pressures.
The slowdown in inflation is largely attributed to a decline in food prices, a trend that had been anticipated by many analysts. A recent survey conducted by 13 economists had predicted that the annual inflation rate for December would drop to 24.2%, further confirming that inflationary pressures were abating.
The recent dip in the inflation rate is largely driven by lower food prices, which had been a significant factor in pushing inflation to higher levels in previous months. The reduction in food prices has provided some relief to Egyptian consumers who have been grappling with rising living costs.
The drop in inflation is also seen as a crucial signal that Egypt’s economic policies aimed at controlling inflation may be starting to bear fruit. Government interventions, including subsidy programs and economic reforms, are likely playing a role in reducing the cost of essential goods.
Inflation Trends in 2024: A Comparison to the Peak of 2023
Despite the recent slowdown, Egypt’s inflation rate remains considerably higher than in previous years. However, it is important to note that the inflation rate in September 2023 reached a historic high of 38%, which was the highest level recorded in over a decade. Since then, inflation has been gradually easing, with November 2024 marking a significant turning point in the trend.
In a broader context, while 24.1% inflation is still high, it is seen as a major improvement from the previous year, and it is expected that continued efforts from the government, alongside favorable global conditions, could further stabilize prices in the coming months.
What’s Next for Egypt’s Inflation?
As the Egyptian economy continues to recover, analysts remain cautiously optimistic about inflationary trends for the coming months. The government’s focus on controlling inflation and boosting local production, particularly in agriculture, could lead to more stable prices in the future. However, factors such as global commodity prices, supply chain disruptions, and local fiscal policies will continue to shape the inflation outlook in 2025.
