IMF’s projects Egypt’s Inflation to cool to 16% by the end of FY2024/2025.

This anticipated decline in inflation is attributed primarily to the unwinding of base effects, coupled with the expected implementation of policy tightening measures that are anticipated to take effect during this period.

In a related vein, the Central Bank of Egypt (CBE) has established an ambitious inflation target to achieve a seven-percent rate (with a permissible variation of plus or minus two percent) by the fourth quarter of 2024.

Following this, the CBE aims to further refine its target to five percent (again, with a tolerance of plus or minus two percent) by the fourth quarter of 2026.

Further contextualizing the economic forecast, the IMF’s World Economic Outlook, released earlier in October, posits that inflation is projected to reach its peak in the current calendar year, anticipated to hit a staggering 33.3 percent. Subsequently, this inflation rate is expected to decline to 21.2 percent as the economy adjusts to the evolving conditions.

Jihad Azour, Director of the Middle East and Central Asia Department at the International Monetary Fund (IMF), had stated in the press conference conducted in October that inflation is anticipated to decrease in Egypt.

Meanwhile, the World Bank’s latest report, titled "Growth in the Middle East and North Africa," echoes this sentiment, projecting that Egypt’s inflation will similarly peak at an even higher rate of 33.6 percent this year before tapering off to a more manageable 17.2 percent in the following year.

It is noteworthy that, despite a general trend of declining inflation over the preceding five months, annual headline inflation surged to 26 percent in September. This rise came as a surprise, considering the downward trajectory observed previously.

In contrast, core inflation—a measure that excludes volatile items—experienced a modest decline of 0.1 percent in September, indicating some level of stability in underlying price pressures.