In February 2025, Egypt experienced a notable decline in core inflation to 10%, with urban inflation falling to 12.8%. This decrease is attributed to price reductions in key sectors. Despite some price increases in essential categories, the Central Bank maintained interest rates, citing ongoing inflationary risks while projecting further downward trends in inflation.
The Central Bank of Egypt (CBE) reported a significant drop in core inflation, noting that monthly core CPI inflation in February 2025 reached 1.6%, down from 13.2% in February 2024. Year-on-year, core CPI inflation decreased to 10% from 22.6% in January 2025, indicating stabilization trends in the economy.
Similarly, Egypt’s overall urban inflation rate fell to 12.8% in February 2025, down from 24% the previous month, largely attributed to base-year effects. The Central Agency for Public Mobilization and Statistics (CAPMAS) highlighted that the national consumer price index recorded 246.8 points for February, reflecting an annual inflation rate of 12.5%, decreasing from 23.2% in January.
The decline in inflation has been linked to notable price reductions in essential sectors. Specifically, vegetable prices decreased by 8.2%, while coffee, tea, and cocoa prices dropped by 0.2%, and household maintenance goods and services saw a 0.1% reduction. Stability was also observed in prices for water and energy supplies, benefiting the overall inflation figures.
Despite a general decrease, certain commodities experienced price increases. Grains and bread saw a rise of 0.8%, while meat and poultry increased by 3.2%. Similarly, costs for fish, dairy products, fats, and fruits also recorded a rise, reflecting varied dynamics across different sectors in the economy.
Housing-related expenses similarly trended upward, with ready-made clothing prices increasing by 0.6%. Rental costs rose by 1.1%, and various household items experienced price hikes, contributing to the overall inflationary pressures in these essential sectors.
Transportation and medical costs also registered increases, with outpatient services up by 0.8% and vehicle purchase costs climbing by 0.3%. Such rises reflect ongoing pressures in crucial economic areas.
In areas of communication, education, and entertainment, notable price increases were observed. Postal service fees soared by 2.9%, while the costs associated with education saw significant hikes, including a 12.5% increase in pre-primary education costs. This trend indicates persistent inflationary pressures across various sectors.
CAPMAS reported that Egypt’s national monthly inflation rate was recorded at 1.4% in February 2025, a marginal decline from 1.6% in January. Concurrently, the CBE Monetary Policy Committee maintained interest rates unchanged during its February meeting, citing growing inflationary risks stemming from global economic uncertainties.
The MPC noted that despite risks, inflation is expected to trend downwards in the first quarter of 2025 due to previous monetary policies. Nevertheless, the committee warned that inflation reductions may slow due to impending fiscal measures. They aim to maintain a restrictive monetary stance to achieve sustained inflation control while being prepared to adjust policies in response to evolving economic conditions.
The decline in Egypt’s core inflation to 10% in February 2025, along with an annual urban inflation decrease to 12.8%, suggests stabilization in economic conditions. Despite some price increases in essential goods and services, overall inflation has moved downwards, prompting the CBE to maintain interest rates. Going forward, the MPC remains cautious yet optimistic about continued inflation improvements amidst rising global economic uncertainties.
Original Source: www.dailynewsegypt.com
