Ahmed Kamel – Egypt Daily News
Egypt’s annual urban consumer inflation rose faster than expected to 12.5% in October, up from 11.7% in September, according to data released Monday by the Central Agency for Public Mobilization and Statistics (CAPMAS). The increase marks the first acceleration in four months, reversing a period of relative stability.
A Reuters poll of 14 analysts had forecast inflation to rise to around 12%, with several attributing the uptick to the recent hike in fuel prices and the implementation of the new rent law affecting older properties.
On a monthly basis, urban inflation climbed 1.8% in October. CAPMAS reported that food and beverage prices increased by 1.5% year-on-year and 1.2% month-on-month, reflecting continued pressures on household budgets.
The government raised prices for a wide range of petroleum products by roughly 13% on October 17, a move aimed at reducing the fiscal burden of energy subsidies but one that immediately fed into transportation and production costs.
At the same time, a new rent law allowing landlords to increase monthly rents on long-term controlled leases, came into effect in early August, with the first noticeable impact on inflation appearing in September’s figures. The legislation, intended to liberalize Egypt’s outdated rental market, has raised housing costs for many tenants, particularly in major cities.
Despite the recent uptick, inflation remains far below its record peak of 38% reached in September 2023. The decline earlier in 2025 had been supported by improved monetary stability and an $8 billion financial assistance package from the International Monetary Fund secured in March 2024.
Data from the Central Bank of Egypt (CBE) showed that broad money supply (M2) growth stood at 22.9% year-on-year in September, nearly unchanged from August. The relative moderation in inflation through much of the year enabled the CBE to ease monetary policy, cutting its overnight lending rate by 100 basis points on October 2, following a 200-basis-point reduction on August 28 the third and fourth cuts of 2025.
However, the latest inflation figures suggest that the central bank may face renewed caution in further rate cuts. In its own statement, the CBE said Egypt’s core inflation which excludes volatile items such as food and energy rose to 12.1% in October from 11.3% in September. The monthly core inflation rate reached 2%, up from 1.5% in September and 1.3% in October 2024.
Overall, both headline and core inflation data indicate that cost pressures are reemerging, largely driven by energy and housing, with secondary effects expected to appear in transportation, food distribution, and retail prices in the months ahead.
Economists note that maintaining price stability while supporting economic recovery will remain a delicate balancing act for policymakers as Egypt continues its structural reforms and prepares for further IMF program reviews in 2026.
