Egypt’s inflation reached two-year low in December

• Inflation at 24.1%
• Fall in line with forecasts
• Food prices down 1.5%

Egypt’s annual urban consumer price inflation rate fell to 24.1 percent year on year in December, as expected, from 25.5 percent in November, its lowest in two years, data from statistics agency Capmas showed on Thursday.

Inflation began surging in 2022 following the Russian invasion of Ukraine, which prompted foreign investors to withdraw billions of dollars from Egyptian treasury markets.

It reached a record high of 38 percent in September 2023 and was as low as 21.27 percent in December 2022.

The decline in December was broadly in line with expectations, with a median of 13 analysts in a Reuters poll having forecast it falling to 24.2 percent.

On a monthly basis, urban prices rose by 0.2 percent compared with 0.5 percent in November, Capmas data showed.

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Food prices dropped by 1.5 percent in December after a 2.8 percent drop in November, putting them 20.3 percent higher than they were a year earlier.

Inflation has been fuelled largely by an expansion of money supply. Egypt’s supply of M2 money – a measure that includes cash, checking deposits and other deposits readily convertible to cash – grew by 29 percent year on year in November, central bank data showed.

Egypt signed an $8 billion financial support package with the International Monetary Fund in March 2024 designed to help it narrow its budget deficit and adopt a less inflationary monetary policy.