Inflation declines in Egypt to 12.2% during June economy

The annual inflation rate in Egypt declined to 12.2% last June, compared to 13% in May, with the general consumer price index falling to 289.5 points, recording a monthly decline of 0.9%, according to data from the Central Agency for Public Mobilization and Statistics.

Food is driving the decline

The monthly decline came after a decline in the prices of a number of major food groups, as the prices of vegetables fell by 12.1%, meat and poultry by 6.4%, and dairy, cheese and eggs by 2.4%, which pushed the food and beverages section as a whole to decline by 3.7% during the month.

However, the agency’s data showed that the decline was not comprehensive, as the prices of grains and bread increased by 0.6%, fruits by 3.5%, oils and fats by 0.5%, the housing, water, electricity, gas and fuel section increased by 1.5%, furniture, fixtures, household equipment and maintenance by 2.3%, health care by 0.6%, and restaurants and hotels by 0.8%.

On an annual basis, price pressures remained concentrated in housing and services items, as housing, water, electricity, gas and fuel increased by 31.2%, transportation and communications by 21.1%, education by 20%, alcoholic beverages and tobacco by 16.9%, and culture and entertainment by 14.9%, compared to a more limited increase in food and beverages of 4.7%.

The data indicate that the decline in inflation in June came largely from volatile food prices, especially vegetables and meat, while housing, transportation, and services items still exert clear annual pressure on the general index.

High interest

The new reading comes as the Central Bank of Egypt keeps its monetary policy tight; On May 21, the Monetary Policy Committee decided to fix interest rates at 19% for overnight deposits, 20% for overnight lending, and 19.5% for the main operation rate, while keeping the discount rate at 19.5%, indicating its assessment of the path of inflation in light of an unfavorable external environment.

Annual inflation, despite its decline, is still higher than the Central Bank’s target of between 5 and 9% during the last quarter of 2026, and the latest data published on the bank’s website before the June reading showed that general urban inflation reached 14.6% in May, and core inflation was 13.8%.

The International Monetary Fund said in late June that the impact of the war in the Middle East on the Egyptian economy remained relatively contained thanks to political measures that it described as decisive, but it noted that general urban inflation remained high at 14.6% in May, and expected it to rise to 15.8% by the end of the fiscal year due to the effects of comparison, the rise in energy prices, and the transmission of the effect of the decline in the exchange rate at the beginning of the war.

In its data on Egypt, the IMF expected that the average consumer price inflation in Egypt would reach 13.2% during 2026.