In February 2025, Egypt’s core inflation decreased to 10%, down from 22.6% in January. Urban inflation also dropped to 12.8%, with monthly inflation at 1.4%. Price reductions in vegetables and maintenance goods were observed, though increases were noted in several sectors, including housing and education. The Central Bank of Egypt held interest rates steady amid evolving economic conditions.
In February 2025, the Central Bank of Egypt (CBE) reported a notable decrease in monthly core Consumer Price Index (CPI) inflation, recording 1.6%, down from 13.2% in February 2024 and slightly lower than 1.7% in January 2025. Year-over-year, core CPI inflation fell to 10%, significantly decreasing from the 22.6% observed in January 2025, indicating a stabilization trend in the economy.
The annual urban inflation rate also experienced a considerable drop, reaching 12.8% from 24% in January 2025, primarily credited to the base-year effect. The Central Agency for Public Mobilization and Statistics (CAPMAS) reported that the monthly inflation rate in urban areas moderated to 1.4%, compared to 1.5% in January. This led to a national consumer price index totaling 246.8 points in February 2025, reflecting an annual inflation rate of 12.5%, down from 23.2% in January.
CAPMAS identified several key sectors contributing to the decline in inflation, including an 8.2% decrease in vegetable prices, a minor 0.2% drop in coffee, tea, and cocoa, and a 0.1% reduction in household maintenance goods and services. Stabilization in prices for water, housing services, electricity, gas, and fuel further supported the lower inflation figures.
Conversely, several commodities saw price increases; for instance, grain and bread prices rose by 0.8%, meat and poultry by 3.2%, and fish and seafood by 0.4%. Additionally, dairy products, cheese, and eggs increased by 0.7%, while oils and fats rose by 0.4%; fruits experienced a 3.0% increase and tobacco surged by 6.3%.
Housing and household-related costs similarly rose, with ready-made clothing prices increasing by 0.6%, and cleaning, repair, and clothing rental services by 0.3%. Moreover, shoe prices climbed by 0.8% and housing rent by 1.1%. Other household goods also experienced price increases, including furniture and home appliances.
Medical and transportation costs also reflected an upward trend, with outpatient and hospital services rising by 0.8% each. Vehicle purchase costs increased by 0.3%, along with private transportation and transport services, each showing minor gains.
The education, communication, and entertainment sectors recorded mixed changes. Postal service fees surged by 2.9%, whereas telephone equipment rose by 0.6%. Cultural services saw a slight increase, while education expenses displayed significant hikes across various educational levels, averaging 12.5% for pre-primary education.
CAPMAS reported an overall national inflation rate of 1.4% in February 2025, compared to 1.6% in January. In light of these developments, the CBE’s Monetary Policy Committee (MPC) opted to maintain interest rates unchanged at its meeting on February 20, 2025. The overnight deposit rate holds at 27.25%, with lending at 28.25% and the main operations rate at 27.75%.
The MPC acknowledged increased inflationary risks due to global economic uncertainties, particularly U.S. protectionist trade policies and geopolitical tensions. However, it projects continued declines in inflation through the first quarter of 2025 due to prior monetary tightening effects. Despite a cautious outlook, the MPC remains committed to achieving a stable inflation environment through tailored monetary policies.
In summary, Egypt’s core inflation showed a significant decrease to 10% in February 2025, indicating a stabilizing economic environment amid changing global conditions. While several sectors experienced price reductions, others saw price hikes, reflecting ongoing inflationary pressures. The Central Bank’s decision to maintain current interest rates demonstrates a cautious approach toward managing inflation risks while aiming for continued economic stability in the near future.
Original Source: www.dailynewsegypt.com
