Egypt’s Annual Inflation Rises to 16.5% in May on Food, Utilities

Key Takeaways

Egypt continues to face inflationary pressure despite recent monetary policy measures, including interest rate hikes by the Central Bank aimed at curbing price growth and stabilizing the Egyptian pound. The latest inflation figures highlight persistent cost-of-living challenges, particularly in essential categories like food and housing. Egypt’s reliance on food imports leaves it exposed to global commodity price shifts and currency fluctuations, especially amid geopolitical tensions and logistical disruptions in the Red Sea. The government has taken steps to mitigate inflation through increased subsidies, import controls, and foreign exchange interventions. However, with the IMF agreement requiring fiscal reforms and currency flexibility, inflationary risks may persist. The rise in utility prices also reflects adjustments in state-controlled energy tariffs, part of a broader effort to reduce budget deficits. These measures, while fiscally necessary, continue to add pressure on household budgets. Economists expect inflation to remain elevated in the short term before gradually easing toward the end of the year, depending on exchange rate movements, global commodity trends, and domestic supply chain resilience.