The Central Agency for Public Mobilization and Statistics (CAPMAS) revealed that the annual urban inflation rose to 26.4% in September 2024, compared to 26.2% in August. In a statement released on Wednesday, CAPMAS reported that the monthly urban inflation remained steady at 2.1% in September, the same as in August.
This rise in inflation came contrary to expectations. The average forecast of 19 analysts had suggested a decrease in the annual urban inflation rate to 25.9% in September, down from 26.2% in August. Additionally, five analysts expected the core inflation rate to drop to 24.8%, down from 25.1% in August.
Inflation has been gradually decreasing from a record high of 38% in September 2023. According to CAPMAS, the overall consumer price index (CPI) for Egypt reached 236.5 points in September 2024, marking a 2.3% monthly increase from August.
Meanwhile, Egypt’s monthly core CPI, computed by the Central Bank of Egypt, recorded 1% in September 2024, compared to 1.1% in September 2023 and 0.9% in August 2024. On an annual basis, core CPI recorded 25% in September 2024, compared to 25.1% in August 2024.
CAPMAS attributed the inflation rise to increases in several categories: the prices of grains and bread rose by 0.7%, meat and poultry by 0.7%, fish and seafood by 1.7%, dairy products, cheese, and eggs by 2.8%, fruits by 1.7%, and vegetables by 12.4%. Additionally, sugar and sugary foods saw a 0.2% increase, while coffee, tea, and cocoa rose by 0.9%, and tobacco prices increased by 0.2%.
Fabric prices rose by 1.1%, ready-made clothing by 0.8%, footwear by 0.3%, and footwear repairs by 2%. Housing-related costs, including actual rent, increased by 0.9%, and utilities such as electricity, gas, and fuel surged by 14.9%. Prices for furniture, appliances, and floor coverings rose by 0.8%, while home maintenance goods and services saw a 1.4% increase.
Medical products and equipment saw a 3% increase, outpatient services rose by 0.6%, and hospital services by 1.3%. Vehicle prices increased by 2.3%, private transportation costs by 1%, and public transport services by 0.6%. Prices for newspapers, books, and stationery rose by 1.8%, while organized tour packages increased by 2.3%, ready-made meals by 1.1%, and personal care services by 1.4%. However, hotel services saw a slight decrease of 0.1%.
CAPMAS also reported that the annual inflation rate for the entire country reached 26% in September 2024, up from 25.6% in August, but significantly down from 40.3% in September 2023.
Prime Minister Mostafa Madbouly previously stated that the government, in coordination with the Central Bank of Egypt (CBE), is targeting a reduction in inflation to 10% by 2025 or early 2026. He emphasized that the CBE has been successful in implementing monetary policy to control inflation.
The CBE expects a significant drop in inflation during the first quarter of 2025. In its last meeting on 5 September, the Monetary Policy Committee (MPC) kept the key interest rates unchanged for the third consecutive time, with deposit and lending rates set at 27.25% and 28.25%, respectively.
In its accompanying statement, the MPC noted that inflation is expected to remain at its current levels through the fourth quarter of 2024, taking into account ongoing fiscal tightening measures. However, inflation is anticipated to decline significantly in early 2025 due to the cumulative effects of monetary tightening and favourable base effects.
The committee also highlighted that inflation remains subject to upward risks, including global oil supply disruptions, escalating geopolitical tensions, potential trade protectionist policies, and the possibility of fiscal adjustments having a more significant impact than expected.
The MPC will continue to closely monitor economic developments and assess risks surrounding inflation forecasts. It affirmed that future monetary policy decisions will be guided by expected inflation rates rather than current inflation figures, emphasizing its commitment to using all available tools to maintain price stability in the medium term.
The next MPC meeting to determine the future of interest rates is scheduled for 17 October, with uncertainty surrounding the decision, as inflation has increased for the second consecutive month.
