Central Agency for Public Mobilisation and Statistics: Egypt’s Annual Inflation Slows to 13% in May 2026 as Disinflation Trend Extends
Egypt’s annual inflation rate eased to 13.0 percent in May 2026 from 13.4 percent in April, according to data released today by the Central Agency for Public Mobilisation and Statistics (CAPMAS). The consumer price index rose 1.4 percent month-on-month, reaching 292 points, as the gradual moderation of price pressures continues to support the country’s improving macroeconomic trajectory. The reading extends a disinflation path that has brought annual inflation down sharply from the elevated levels recorded in 2024 and early 2025.
The May reading is consistent with the Central Bank of Egypt’s inflation targeting framework. The CBE has set a target of 7 percent (±2 percentage points) for Q4 2026, and the progressive easing of headline inflation toward that corridor — from a peak above 30 percent in 2023 — represents a significant macroeconomic achievement, supported by monetary tightening, exchange rate stabilisation, and structural reform.
Inflation Trend Continues to Moderate
The May reading of 13.0 percent annual inflation marks the continuation of a moderation that has been broadly in place since the second half of 2024, interrupted briefly in early 2026 by energy-related pass-through effects tied to fuel price adjustments and regional geopolitical pressures. The April reading of 13.4 percent had itself eased from the 15.2 percent recorded in March, which was elevated by a fuel price adjustment implemented in early March. May’s further easing suggests the one-off price effects are fading.
Key Drivers of the Monthly Movement
The 1.4 percent monthly increase in the CPI was partially driven by food-related categories. Fish and seafood prices rose 1.3 percent over the month, contributing to the food and beverages component. The monthly pace of 1.4 percent is notably slower than the 3.2 percent recorded in March and the 1.1 percent in April, indicating that the episode of price acceleration driven by fuel adjustments and regional supply factors is progressively unwinding.
Context: Reform Momentum and External Support
The moderation comes as Egypt’s economic reform programme, backed by an $8 billion International Monetary Fund Extended Fund Facility agreed in March 2024, continues to underpin macroeconomic stabilisation. Egypt’s economic outlook is improving, with the CBE projecting growth of 4.3 to 4.5 percent in the current fiscal year and average annual inflation of approximately 12 percent. The gradual disinflation, combined with a stabilised exchange rate and recovering foreign currency reserves — which reached $53.1 billion at end-May 2026 — provides a more favourable backdrop for consumer purchasing power and private sector confidence.
Monetary Policy Implications
The CBE’s Monetary Policy Committee last met in May 2026, when it decided to keep key policy rates unchanged: the overnight deposit rate at 19 percent, the overnight lending rate at 20 percent, and the main operation rate at 19.5 percent. The May inflation reading, which remains comfortably within the trajectory the MPC has been monitoring, supports the current stance. Further easing of rates is conditional on inflation continuing to decline toward the CBE’s Q4 2026 target corridor of 7 percent (±2 percentage points).
The CBE has already delivered cumulative rate cuts of 100 basis points since February 2026, when it reduced rates from 20/21/20.5 to 19/20/19.5 percent. Additional cuts are expected to follow as inflation tracks lower, though the pace will depend on data evolution and global commodity price developments.
Outlook
Egypt’s inflation trajectory for the remainder of 2026 will depend on several variables: the path of global energy prices, domestic fuel pricing policy, the exchange rate, and whether food price pressures remain contained. The current disinflation trend provides a supportive backdrop for continued monetary easing, stronger real purchasing power, and an improvement in consumer confidence. The CBE’s inflation target for Q4 2026 at 7 percent remains ambitious but the directional trend is supportive.
Sources: Central Agency for Public Mobilisation and Statistics (CAPMAS) Consumer Price Index, May 2026 release, June 10, 2026; Central Bank of Egypt (CBE) Monetary Policy Committee statement, May 2026; IMF Egypt Extended Fund Facility documentation; and verified market information available as of June 2026.
