Egypt’s headline inflation slowed to 25.7% in July

Image credit: Tamer Soliman/ Getty Images

Egypt’s annual urban consumer price inflation slid to 25.7 per cent in July from 27.5 per cent in June, a rate of decline faster than analysts had forecast, the country’s statistics agency CAPMAS showed on Thursday.

Month-on-month, prices fell by 0.4 per cent in July, down from 1.6 per cent in June. Food prices declined by 0.3 per cent in July, though they were still 28.5 per cent higher than a year ago.

A poll of 18 analysts had expected inflation to slow to a median of 26.6 per cent in July, extending a deceleration that began in September, when it reached a peak of 38 per cent.

Egypt has tightened its monetary policy under an $8bn International Monetary Fund financial support package it signed in March, although that programme has also required it to increase many domestic prices and let its currency plunge.

The central bank hiked interest rates by 600 basis points (bps) on March 6, bringing total increases in 2024 to 800 bps.

The government raised the price of some subsidised products to battle a budget deficit that hit $10.27bn (EGP505bn) in an EGP3.02tn budget in the year that ended on June 30.

The government raised the price of subsidised bread by 300 per cent on June 1 and on July 25, the price of fuel by up to 15 per cent.

Read: Egypt says it cut foreign debt by $14bn