Egypt’s core inflation declined to 10% in February 2025, down from 22.6% in January. Monthly core inflation was recorded at 1.6%. Urban inflation followed a similar downward trend, reaching 12.8%. Despite an overall decline, several essential goods and services faced price increases. The Central Bank maintained stable interest rates amidst rising inflationary risks, anticipating continued trends of inflation easing.
In February 2025, Egypt’s core inflation rate fell to 10%, a significant decrease from 22.6% in January 2025, according to the Central Bank of Egypt (CBE). The monthly core Consumer Price Index (CPI) inflation was reported at 1.6%, a reduction from 13.2% year-over-year. This trend indicates an easing inflationary environment, bolstered by various stabilizing factors within the economy.
Additionally, Egypt’s annual urban inflation rate decreased to 12.8% in February 2025 from 24% in January 2025, influenced chiefly by the base-year effect. The Central Agency for Public Mobilization and Statistics (CAPMAS) noted that the monthly inflation in urban sectors was 1.4%, slightly down from 1.5% in January 2025. Furthermore, the national consumer price index rose to 246.8 points, translating to an overall inflation rate of 12.5% year-on-year, compared to 23.2% the previous month.
The decline in inflation can be credited to significant price decreases in essential sectors, such as an 8.2% reduction in vegetable prices. Minor reductions were observed in coffee, tea, and cocoa prices (0.2%), as well as household maintenance goods and services (0.1%). In addition, prices for utility services such as water, housing, electricity, and fuels remained stable, contributing positively to the overall inflation figures.
Contrarily, certain commodities faced price hikes, including a 0.8% rise in grain and bread, and a 3.2% increase in meat and poultry. Further price increases included fish and seafood (0.4%), dairy products (0.7%), oils and fats (0.4%), and fruits (3.0%). Sugar and confectionery recorded a marginal increase of 0.1%, with tobacco prices rising significantly by 6.3%.
Moreover, the costs associated with housing and household essentials also exhibited upward trends. Ready-made clothing prices increased by 0.6%, while cleaning, repair, and rental services rose by 0.3%. Housing-related expenses such as rent and furnishings similarly saw increments. These increases indicate a persistent inflationary pressure within consumer-related costs.
Medical and transportation expenditures followed suit with price elevations; for instance, outpatient services rose by 0.8% and hospital services also increased by 0.8%. Vehicle purchase costs showed a 0.3% increase alongside a slight rise in private transportation costs. These cumulative effects point toward a broader inflationary pressure across various sectors.
Within the communication, education, and entertainment realms, postal fees surged by 2.9%, while educational expenses increased significantly, particularly in early and secondary education. These trends indicate a revaluation of costs associated with essential services and educational infrastructure, thereby impacting household budgets.
Despite an overall monthly inflation rate decline to 1.4% in February from 1.6% in January, the CBE’s Monetary Policy Committee (MPC) opted to maintain interest rates unchanged for the seventh consecutive time at a February meeting. This decision reflects a cautious stance in the face of inflationary risks linked to global economic uncertainties, as highlighted by potential U.S. protectionist policies.
The MPC anticipates that inflation will continue to decrease in early 2025 due to previous monetary policies and the base-year impact. However, it acknowledges a potential slowing in this decline due to fiscal consolidation measures. Over the medium term, the MPC envisions a return to historical inflation rates, signaling optimism in inflation management.
While inflation declined more slowly in the latter half of 2024 compared to earlier periods, core inflation remained stable in Q4 2024. The MPC emphasizes a rigorous monetary policy stance to sustain and achieve significant inflation reductions. Future policy adaptations will be contingent upon shifting economic conditions, underscoring a commitment to controlling inflation and addressing demand-driven pressures.
In conclusion, Egypt’s core inflation has significantly decreased to 10% in February 2025, following a similar trend in urban inflation rates. The declines are attributed to decreased prices in critical sectors, although several commodities and services continue experiencing price increases. The Central Bank has kept interest rates unchanged amidst mounting inflationary risks. The outlook remains cautiously optimistic, expecting continued inflation decline in the coming months, supported by previous economic measures.
Original Source: www.dailynewsegypt.com
