RIYADH: Egypt’s annual nationwide inflation rate eased to 12.7 percent in August from 13 percent in the previous month, as lower food prices offset increases in electricity, housing and other household costs.
The nationwide consumer price index was unchanged from July at 289.8 points, according to data from the Central Agency for Public Mobilization and Statistics. Annual urban inflation also eased to 14.5 percent from 14.9 percent in July.
Egypt continued to experience faster price growth than several regional peers, although the latest available comparative readings are for July rather than August.
Saudi Arabia’s annual inflation was 1.8 percent in July, while Jordan’s was 2.7 percent, according to official data from the respective countries. Morocco recorded a 0.6 percent annual decline in consumer prices.
The International Monetary Fund expects Egypt’s inflation to rise to 16.7 percent in the second half of 2026, reflecting higher energy prices, exchange-rate depreciation and unfavorable base effects.
In its latest report, CAPMAS stated: “The food and beverages division recorded a decrease of 1.2 percent due to a 0.1 percent decrease in the prices of cereals and bread, a 1.5 percent decrease in the prices of meat and poultry, a 0.1 percent decrease in the prices of fish and seafood, and a 7 percent decrease in the prices of vegetables.”
Housing costs climb
Housing, water, electricity, gas and other fuels rose 1.9 percent during the month. Electricity, gas and fuel prices increased 4.3 percent, while actual rents rose 0.8 percent and housing maintenance costs increased 0.5 percent.
Prices for furnishings and household equipment rose 0.7 percent, while clothing increased 0.5 percent, healthcare 0.4 percent, transport 0.2 percent, and restaurants and hotels 0.5 percent.
On an annual basis, housing, water, electricity, gas and other fuels recorded the largest increase, at 33 percent, with actual rents up 28 percent and electricity, gas and fuels rising 22.4 percent.
Transport costs increased 21.7 percent annually, while education rose 20 percent and recreation and culture increased 15.3 percent. Food and beverages prices rose 6.5 percent, with vegetable prices up 27.7 percent.
Monetary policy
The inflation data comes after the Central Bank of Egypt kept its key interest rates unchanged last month, with the overnight deposit rate at 19 percent and the lending rate at 20 percent. The main operation and discount rates were maintained at 19.5 percent.
The CBE expects headline inflation to accelerate through the third quarter because of unfavorable base effects before gradually declining from the first quarter of 2027. It expects inflation to converge toward its 7 percent target, plus or minus 2 percentage points, during the second half of 2027.
The central bank has warned that the inflation outlook remains exposed to risks from regional hostilities and a stronger-than-expected pass-through from fiscal consolidation measures.