Egypt Urban Inflation Rises to 12.5% in October
- Egypt experienced a rise in inflation during October 2025, driven by increased petroleum product prices and rising costs in essential consumer categories.
- The Central Bank of Egypt reported a monthly core Consumer Price Index (CPI) increase of 2% in October 2025, a significant jump from 1.5% in September 2025 and...
- the nationwide annual inflation rate, as reported by the Central Agency for Public Mobilization and Statistics (CAPMAS), showed a slight decrease to 10.1% in October, compared to 10.3%...
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Egypt’s Inflation rises in October 2025 Amidst Price Hikes and Interest Rate Cut
Table of Contents
Overview
Egypt experienced a rise in inflation during October 2025, driven by increased petroleum product prices and rising costs in essential consumer categories. Despite this, the Central Bank of Egypt (CBE) opted to reduce key interest rates, anticipating a gradual easing of inflation in the coming years. This report details the key economic indicators released in November 2025, providing context and future projections.
Inflation Data: October 2025
The Central Bank of Egypt reported a monthly core Consumer Price Index (CPI) increase of 2% in October 2025, a significant jump from 1.5% in September 2025 and 1.3% in October 2024. Annual core inflation reached 12.1%, up from the previous month’s 11.3%.
the nationwide annual inflation rate, as reported by the Central Agency for Public Mobilization and Statistics (CAPMAS), showed a slight decrease to 10.1% in October, compared to 10.3% in september. The overall CPI for the country reached 264.3 points in October, representing a 1.3% monthly increase.
Key drivers of Inflation
The increase in the CPI was primarily attributed to higher prices in several key categories. Significant price gains were recorded in:
- food: Grains and bread,meat and poultry,dairy products,oils and fats,vegetables,sugar and confectionery,and beverages.
- Non-Food: Textiles, ready-made clothing, footwear, rent, and household maintenance.
- Tobacco: Prices also increased in this category.
However, some prices experienced declines. Fish and seafood prices fell by 0.3%, fruits decreased by 10.6%, and audio-visual equipment, computers, and hotel services registered minor decreases.
Petroleum Price Increases
A key factor contributing to the inflationary pressure was the government’s decision to raise petroleum product prices by 10.5-12.9% in October. This move likely had a ripple effect across various sectors, increasing transportation costs and impacting the prices of goods and services.
CBE response: Interest Rate cut
Despite the rising inflation, the Monetary Policy committee (MPC) of the Central Bank of Egypt decided to cut key interest rates by one percentage point at its October meeting.this brought the deposit rate to 21%, the lending rate to 22%, and the main operation and discount rates to 21.5%.
The CBE stated that this move was intended to support the decline in inflation expectations and reinforce monetary policy consistency. However, the committee also cautioned that inflation remains vulnerable to upside risks, including potential further administrative price adjustments and ongoing geopolitical tensions in the region.
Future Inflation Projections
The CBE projects that average annual headline inflation will ease to 14% in 2025 and further to 10.5% in 2026,a ample decrease from the 28.3% recorded in 2024. The CBE anticipates inflation converging toward its medium-term target of 7% (±2%) by the fourth quarter of 2026 and 5% (±2%) by the fourth quarter of 2028.
Implications and Outlook
The combination of rising inflation and an interest rate cut presents a complex economic scenario for Egypt. While the rate cut aims to stimulate economic activity, it also carries the risk of further fueling inflation if not carefully managed. The CBE’s projections suggest a commitment to bringing inflation under control, but the realization of these projections will depend