Egypt’s annual inflation rate is expected to tick slightly higher in December, edging up to 12.5 percent from 12.3 percent in November, according to a survey of economists conducted by Reuters, as food prices remained broadly stable at the end of the year.
The country’s official statistics agency, the Central Agency for Public Mobilisation and Statistics (CAPMAS), is scheduled to release the December inflation figures on Saturday.
The median forecast for annual headline urban consumer inflation was calculated from a poll of 16 analysts between January 5 and January 7. In November, inflation had unexpectedly declined, reinforcing expectations that Egypt’s prolonged price surge was continuing to ease.
Analysts said December’s modest increase largely reflects stable prices across key food items, which make up a significant share of Egypt’s inflation basket, rather than renewed inflationary pressure.
“Prices of goods and services were largely stable during the month, including poultry and eggs,” said Hany Genena, an economist at Pharos Holding. “Poultry prices only started to rise in January, which could push month-on-month inflation higher in January 2026, but not in December 2025.”
Food prices have been a central driver of inflation dynamics in Egypt over the past three years, particularly following currency devaluations, supply disruptions and a surge in import costs. However, relative currency stability and easing global commodity prices have helped contain food inflation in recent months.
Core inflation, which excludes volatile items such as certain food products and fuel, is also expected to ease slightly. Five analysts polled forecast core inflation to slip to a median of 12.4 percent in December, down from 12.5 percent in November, suggesting underlying price pressures continue to cool.
Egypt’s inflation rate has fallen sharply from its peak of nearly 38 percent in September 2023, when the country was grappling with a severe foreign currency shortage and soaring import prices. The decline has been supported by a series of economic reforms and external financing agreements.
In March 2024, Egypt secured an $8 billion financial support package from the International Monetary Fund as part of a broader effort to stabilise the economy, rebuild foreign exchange reserves and restore investor confidence. The agreement included commitments to fiscal discipline, monetary tightening and greater exchange-rate flexibility.
While inflation has moderated significantly, economists caution that price pressures have not fully dissipated. Growth in the money supply remains elevated, which could limit the pace of further disinflation.
Data from Egypt’s central bank showed broad money supply (M2) grew by 22.14 percent year-on-year in November, up slightly from 21.68 percent in October. Although well below the peak of 31.5 percent recorded in January 2023, analysts say the expansion continues to pose inflationary risks.
The recent easing in inflation has nevertheless given policymakers room to begin cautiously loosening monetary policy. In December, the Central Bank of Egypt cut its overnight lending rate by 100 basis points to 21.00 percent, marking the first rate cut in several years.
The move brought total interest rate reductions in 2025 to 725 basis points, reflecting growing confidence among policymakers that inflation is on a sustainable downward path.
The central bank’s monetary policy committee is scheduled to meet again on February 12 to review interest rates. Economists expect officials to proceed cautiously, balancing the need to support economic growth against the risk of reigniting inflation.
Despite the recent improvement, inflation remains well above pre-crisis levels and continues to weigh on household purchasing power. Rising living costs were a key concern for Egyptians during the inflation spike of 2022 and 2023, when food and energy prices surged.
Analysts say the December data will be closely watched for confirmation that Egypt’s disinflation trend remains intact as the country enters 2026, particularly amid uncertainties around global commodity prices, regional geopolitics and domestic demand.
For now, the outlook suggests inflation is stabilising at significantly lower levels than in recent years, offering cautious optimism for policymakers and consumers alike.
