Egypt’s annual urban headline inflation remained stable at 24% in January 2025, slightly down from 24.1% in December 2024, marking its lowest rate in two years, according to the Central Bank of Egypt (CBE). The slight decline was due to a mild slowdown in non-food inflation, which fell from 26.7% to 26.2%, counteracting a modest rise in food inflation from 20.3% to 20.8%.
Annual core inflation continued to ease, reaching 22.6% in January compared to 23.2% in December. On a monthly basis, core inflation registered 1.7%, reflecting higher prices for core food items, particularly poultry and market rice, following their usual pre-Ramadan seasonal pattern. Additionally, retail and services inflation saw an uptick, driven by increased costs in clothing and footwear, household cleaning products, restaurant and café expenditures, and rents. Notably, January 2024 had recorded a higher monthly core inflation rate of 2.2%.
Monthly urban headline inflation stood at 1.5% in January 2025, compared to 1.6% in the same month of 2024 and 0.2% in December 2024. Annual rural headline inflation remained broadly stable at 22.6% in January, down from 22.8% in December. Nationwide headline inflation followed a similar trend, easing slightly to 23.2% from 23.4% over the same period.
Fresh fruit prices rose by 5.8%, while fresh vegetables declined by 2.3%, resulting in a minor net contribution to monthly headline inflation. Poultry prices surged by 10.3% in line with their typical pre-Ramadan seasonal trend, significantly impacting inflation. Market rice, oils and fats, and dairy products also saw price increases, contributing to inflationary pressures. Other core food items, including red meat, sugar, pulses, confectionery, and tea, added further to the overall inflation rate.
Retail items recorded a 2.6% price increase, mainly driven by clothing, footwear, personal care products, and household cleaning supplies. Services inflation rose by 0.7%, influenced by higher spending on restaurants, cafés, and rents. Meanwhile, the cost of regulated items climbed by 1.1%, primarily due to recent price hikes in pharmaceuticals and tobacco.
The overall inflation dynamics were shaped by rising food prices, which contributed 0.93 percentage points to monthly core inflation. Retail items added 0.50 percentage points, while services contributed 0.26 percentage points. The inflation outlook remains subject to seasonal fluctuations, regulatory price adjustments, and broader economic conditions.
