Egypt’s urban consumer price inflation surged to 16.8 percent in May, up from 13.9 percent in April, official figures from the Central Agency for Public Mobilization and Statistics (CAPMAS) revealed on Wednesday. The unexpected rise outpaced market forecasts, reflecting complex economic dynamics including a notable base effect.
While the inflation uptick signals renewed pressure on prices, it follows a marked easing from a peak of 38 percent recorded in September 2023. The recent downward trajectory was bolstered by a significant $8 billion financial support package secured from the International Monetary Fund (IMF) in March 2024, which helped stabilize Egypt’s fragile economy.
In line with improving inflation trends earlier this year, the Central Bank of Egypt implemented aggressive interest rate cuts, lowering its overnight lending rate by 225 basis points to 26.0 percent in mid-April, then trimming another 100 basis points in late May. These monetary policy adjustments aimed to boost economic growth by easing borrowing costs after a period of restrictive financial measures.
Despite these gains, the rise in May’s inflation rate underscores the ongoing challenges facing Egypt’s policymakers as they strive to balance economic stability with growth, against the backdrop of global and domestic pressures.