Egypt: Inflation falls to over one-year low in June
Inflation eased for a fourth consecutive month in June, waning to 27.5% in June, below May’s 28.2%. June’s result represented the weakest inflation rate since January 2023. Looking at the details of the release, the slowdown in price pressures was primarily due to a moderation in transport price growth. Conversely, prices for food and non-alcoholic beverages rose at a steeper pace; this was a result of the 300% increase in the price of subsidized bread from 1 June.
Accordingly, the trend pointed down, with annual average inflation coming in at 33.3% in June (May: 34.1%). Meanwhile, core inflation fell to 26.6% in June from May’s 27.1%.
Finally, consumer prices increased 1.56% in June over the previous month, contrasting May’s 0.68% drop. June’s jump was the highest reading since February.
Our Consensus is for inflation to continue gradually decelerating in H2 and to average below H1. That said, average inflation is expected to remain above the Central Bank of Egypt’s 5.0–9.0% target band until calendar year 2027. Additionally, upside risks remain: Further reductions in subsidies may occur ahead as part of the reforms needed to continue receiving IMF funds.