Egypt’s annual inflation declines to 23.4 percent in December 2024

According to the latest data from Egypt's Central Agency for Public Mobilization and Statistics (CAPMAS), Egypt's annual inflation rate in December 2024 decreased to 23.4% from 25% in November, mainly due to a significant drop in food prices. Specifically, the prices in the food and non-alcoholic beverages category fell by 1.7%.

Vegetable prices saw the most significant decrease, dropping by 14% last month. Additionally, the prices of milk, cheese and eggs, fish and seafood, as well as meat and poultry, also decreased in December. Meanwhile, prices for clothing and footwear increased by 1%, and housing, water, electricity, gas and other fuels rose by 0.9%.

Furniture and household equipment prices increased by 0.7%, healthcare prices rose by 3.7%, and transportation prices saw a 0.5% increase. Furthermore, the communication sector experienced a notable price hike of 10.2%, while leisure and culture prices rose by 0.2%, and restaurants and hotels saw a 0.9% increase.

Egypt's inflation rate has been on a downward trend since the announcement of the Ras El Hekma deal last year. After reaching a historic high of 38% in September 2023, it fell to 25% in November. Egypt's inflation began to rise in early 2022 following Russia's invasion of Ukraine, which prompted foreign investors to withdraw billions of dollars from the Egyptian treasury market. The Ras El Hekma investment from the UAE, along with other reform measures, has allowed Egypt to begin recovering from its economic slowdown.

The Egyptian economy is projected to grow by 3.5% to 4.5% in 2025 as the country continues to implement significant reforms to increase investment and reduce inflation. The International Monetary Fund projects that the Egyptian economy will grow by 4% in 2025, with an expected growth rate of 2.7% in 2024. Meanwhile, the World Bank expects the Egyptian economy to grow by 3.5% and 4.2% in 2025 and 2026, respectively.

As the inflation rate continues to decline, Egypt's net foreign exchange reserves increased to $47.109 billion in December, up from $46.952 billion in November, according to the latest data from the central bank. This upward trend began in June, when reserves increased from $46.126 billion in May to $46.3 billion, following increases from $40.4 billion and $41 billion in March and April, respectively.

Egypt attributes the increase in reserves to a surge in nationwide investment and international financial aid packages. Notably, the $35 billion deal with the UAE regarding Ras El Hekma, signed in February, marked the largest foreign direct investment agreement in Egypt's history. Following the deal, Egypt's net international reserves increased by $11.2 billion within five months.

Additionally, Egypt has secured financial aid packages worth over $57 billion from international financial institutions and development partners. In July, Egypt received the third tranche of an $8 billion loan program from the IMF after successfully completing its third review. Furthermore, a 1 billion euro agreement was reached during the Egypt-EU Investment Conference as part of the EU's commitment of 7.4 billion euros to Egypt.

The reports on our website are for informational purposes only. Content that includes financial, investment, tax or legal content should not be considered financial advice or recommendations. Please see our full disclaimer policy.