The Central Bank of Egypt (CBE) reported on Monday that monthly core CPI inflation stood at 1.6% in February 2025, down from 13.2% in February 2024 and slightly lower than 1.7% in January 2025. On an annual basis, core CPI inflation dropped to 10% in February 2025, a significant decline from 22.6% in January 2025.
Moreover, Egypt’s annual urban inflation rate recorded a significant decline in February 2025, dropping to 12.8% from 24% in January, primarily due to the base-year effect.
In an official statement released Monday, the Central Agency for Public Mobilization and Statistics (CAPMAS) reported that the monthly inflation rate in urban areas also eased to 1.4% in February, down from 1.5% in January. The agency further noted that the national consumer price index stood at 246.8 points in February 2025, reflecting an annual inflation rate of 12.5%, compared to 23.2% in January.
CAPMAS attributed the decline in inflation to notable price reductions in key sectors, including an 8.2% decrease in vegetable prices, a 0.2% drop in coffee, tea, and cocoa prices, and a 0.1% reduction in the cost of household maintenance goods and services. Additionally, prices for water, miscellaneous housing services, electricity, gas, and other fuel sources remained stable, further contributing to the lower inflation figures.
However, despite the overall slowdown, several commodities and services experienced price increases. Grain and bread prices rose by 0.8%, while meat and poultry saw a 3.2% increase. The cost of fish and seafood edged up by 0.4%, dairy products, cheese, and eggs by 0.7%, oils and fats by 0.4%, and fruits by 3.0%. Sugar and confectionery prices recorded a slight uptick of 0.1%, while tobacco saw a more pronounced rise of 6.3%.
Housing and household-related expenses also trended upward. Ready-made clothing prices increased by 0.6%, with cleaning, repair, and clothing rental services rising by 0.3%. Shoe prices climbed by 0.8%, while shoe repairs increased by 0.7%. Additionally, actual housing rent went up by 1.1%, household furnishings by 0.9%, home appliances by 0.7%, glassware and tableware by 0.6%, and household and garden tools by 0.5%.
Medical and transportation costs followed a similar pattern, with medical products and equipment increasing by 0.5%, outpatient services by 0.8%, and hospital services by 0.8%. The cost of purchasing vehicles rose by 0.3%, private transportation expenses by 0.2%, and transport services by 0.5%.
In the communication, education, and entertainment sectors, postal service fees increased by 2.9%, while the cost of telephone and fax equipment rose by 0.6%. Cultural and entertainment services saw a slight increase of 0.1%, whereas the price of newspapers, books, and stationery surged by 10.7%. Education expenses also recorded notable hikes, with pre-primary and basic education costs increasing by 12.5%, secondary and technical education by 4.3%, post-secondary and technical education by 4.3%, and higher education by 12.2%.
Hospitality and personal care expenses continued to rise, with prepared meal prices increasing by 0.5%, hotel services by 8.0%, personal care products by 0.6%, and personal accessories by 3.7%.
CAPMAS reported that Egypt’s overall monthly inflation rate for the entire country stood at 1.4% in February 2025, compared to 1.6% in January.
Meanwhile, the Central Bank of Egypt’s (CBE) Monetary Policy Committee (MPC) opted to keep interest rates unchanged for the seventh consecutive time at its February 20, 2025, meeting. The overnight deposit rate remained at 27.25%, the overnight lending rate at 28.25%, and both the main operation rate and discount rate at 27.75%.
The MPC cited growing inflationary risks compared to its previous meeting in December 2024, attributing them to heightened uncertainty surrounding global and regional economic conditions. Factors such as U.S. protectionist trade policies and ongoing geopolitical tensions were identified as key concerns.
Despite these risks, the committee expects inflation to continue its downward trend in the first quarter of 2025, driven by the cumulative effects of monetary tightening and the base-year effect. However, it cautioned that the pace of decline may slow due to the anticipated impact of fiscal consolidation measures. Over the medium term, the MPC expects monthly inflation rates to return to historical levels, signaling improved inflation expectations.
While annual inflation slowed at a weaker pace in the second half of 2024 compared to the first half, core inflation remained relatively stable in the fourth quarter of 2024. Given the prevailing uncertainty, the MPC believes that maintaining a restrictive monetary policy stance is necessary to ensure a sustained and substantial reduction in inflation.
Looking ahead, the committee emphasized that future policy decisions will be based on evolving economic conditions, with each meeting assessed independently to determine the appropriate timing for an easing cycle. It reiterated its commitment to utilizing all available tools to bring inflation back within its target range, curbing demand-driven pressures and mitigating secondary effects of supply shocks.
