Favourable base effects, declining food prices drive down Egypt’s inflation

Egypt’s annual urban headline inflation rate declined for the fifth consecutive month in July 2024, reaching 25.7%, according to the Central Bank of Egypt (CBE). This marks a decrease from 27.5% in June 2024.

The CBE attributed the continued decline to favourable base effects from the strong inflationary pressures seen in 2023, as well as a decline in both food and non-food inflation.

Annual food inflation fell to 29.7% in July 2024, down from 31.9% in June 2024. The CBE attributed this decline primarily to a decrease in core food prices. Non-food inflation also decelerated, reaching 22.9% in July 2024, compared to 24.5% in June 2024.

Annual core inflation also saw a decline, reaching 24.4% in July 2024 from 26.6% in June 2024, marking its lowest level since December 2022. This consistent decline over five months is reflected in monthly core inflation, which recorded a negative 0.5% in July 2024 compared to 1.3% in the same month of 2023.

Monthly urban headline inflation recorded 0.4% in July 2024, compared with 1.9% in the same month of 2023 and 1.6% in June 2024. The higher prices of volatile food items were partially offset by a decline in core food prices.