Egypt’s Urban Inflation Eases to 14.5 Percent in August as Core Climbs Above It to 14.9 Percent
Egypt’s annual urban inflation eased to 14.5 percent in August from 14.9 percent in July, per the Central Bank of Egypt’s published rates, as food prices fell for the month and offset a 4.3 percent monthly rise in electricity, gas and other fuels on the nationwide index. Core inflation, which the central bank computes by stripping out regulated items and fruit and vegetables, moved the other way, to 14.9 percent from 14.7 percent, and now sits above the headline rate by 0.4 percentage points, on our calculation, after trailing it by 0.2 points in July. The monthly numbers explain the split: urban prices rose 0.1 percent in August, with fruit and vegetables down 5.5 percent and regulated items up 1.0 percent, while the core index rose 0.3 percent, per the same figures. On the nationwide measure published by CAPMAS, the statistics agency, the consumer price index was unchanged on the month at 289.8 points and annual inflation slowed to 12.7 percent from 13.0 percent.
Food down, housing and fuel up
CAPMAS’s nationwide breakdown shows where the month went. Food and beverages fell 1.2 percent from July, led by a 7.0 percent drop in vegetables and 1.5 percent in meat and poultry, while dairy, cheese and eggs rose 1.3 percent. Housing, water, electricity and gas rose 1.9 percent, with actual rents up 0.8 percent and the electricity, gas and other fuels group up 4.3 percent. Clothing and footwear rose 0.5 percent, restaurants and hotels 0.5 percent, furnishings 0.7 percent and transport 0.2 percent, per the release. The result is a headline that did not move on the month at all nationally, and moved 0.1 percent in the cities, while the core measure that excludes fruit and vegetables and regulated items rose 0.3 percent, per the central bank’s figures.
The annual picture is more uneven than the headline suggests, on our reading of the same release’s divisions. Housing, water, electricity and gas are 33.0 percent higher than a year earlier, with rents up 28.0 percent and electricity, gas and other fuels up 22.4 percent; transport is up 21.7 percent, education 20.0 percent, culture and recreation 15.3 percent, furnishings 14.8 percent and restaurants 13.4 percent. Food and beverages are up 6.5 percent, about half the 12.7 percent nationwide rate, on our calculation, with vegetables up 27.7 percent but dairy 0.5 percent lower. Housing inflation at 33.0 percent is 2.6 times the nationwide rate, on our calculation, so the disinflation in the headline is being delivered by food while administered and shelter costs run far above it.
Against the central bank’s own map
The reading lands 3 weeks after the Monetary Policy Committee held its overnight deposit rate at 19.00 percent, the lending rate at 20.00 percent and the main operation rate at 19.50 percent on 20 August, saying annual headline inflation was projected to accelerate through the third quarter on average, partly on an unfavourable base effect, before declining from the first quarter of 2027 toward its target of 7 percent, plus or minus 2 percentage points, during the second half of 2027. August’s fall from 14.9 to 14.5 percent leaves the third quarter’s average so far at 14.7 percent against 14.6 percent for the second quarter, on our calculation from the April, May and June readings of 14.9, 14.6 and 14.3 percent carried in our earlier pieces, so the acceleration the committee expected is 0.1 percentage points to date. The committee also noted that both monthly headline and core inflation printed 0.0 percent in July; August’s 0.1 and 0.3 percent keep the monthly increases small.
At 19.00 percent the overnight deposit rate stands 4.5 percentage points above August headline inflation and 4.1 points above core, on our calculation, the cushion the committee described as an adequately positive real interest rate margin. The urban rate the bank targets runs 1.8 percentage points above the nationwide rate, on our calculation from the 2 releases. The committee meets next on 24 September, per our piece of 20 August.
| Urban inflation, Egypt | August, annual | July, annual | August, monthly |
|---|---|---|---|
| Fruit and vegetables | 18.6% | -5.5% | |
| Core | 14.9% | 14.7% | 0.3% |
| Headline | 14.5% | 14.9% | 0.1% |
| Regulated items | 12.3% | 1.0% |
Central Bank of Egypt inflation rates for August 2026, ranked by the annual rate; the July annual headline and core rates are from the bank’s Monetary Policy Committee release of 20 August 2026, and July rates are shown where that release states them.
| CAPMAS division, nationwide | Annual change | Monthly change |
|---|---|---|
| Housing, water, electricity and gas | 33.0% | 1.9% |
| Transport | 21.7% | 0.2% |
| Education | 20.0% | |
| Culture and recreation | 15.3% | |
| Furnishings and household equipment | 14.8% | 0.7% |
| Restaurants and hotels | 13.4% | 0.5% |
| All items | 12.7% | 0.0% |
| Clothing and footwear | 12.6% | 0.5% |
| Food and beverages | 6.5% | -1.2% |
| Health | 5.2% | 0.4% |
CAPMAS consumer price index for the whole republic, August 2026 against August 2025 and against July 2026, ranked by the annual change; divisions without a monthly figure in the release are left blank.
Why it matters: The central bank told the market in August to expect a faster third quarter, and August delivered a slower headline with a faster core, a combination that makes the case for a September cut less straightforward, on our reading. Headline inflation is being pulled down by vegetables, which the bank’s core measure excludes, and by meat, which it does not, while the core measure it does watch has risen for 2 consecutive months on the annual figures and now exceeds the headline. The administered side is doing what the bank flagged as an upside risk: electricity, gas and fuel prices rose 4.3 percent in a single month and are 22.4 percent higher than a year ago, and rents are up 28.0 percent. With the 19.00 percent deposit rate standing 4.5 percentage points above current headline inflation, the committee retains a substantial nominal cushion over current inflation, while the rise in core inflation and the administered price pressures give it reason to remain cautious in September, on our reading.
Outlook: The Monetary Policy Committee decides on 24 September with August as the latest print, and the base effect the bank cited runs through September, so the third quarter average is still open. The test for the bank’s path is whether core inflation, at 14.9 percent, turns down as the food led headline has, since reaching 7 percent, plus or minus 2 points, in the second half of 2027 requires headline inflation to fall from 14.5 percent to no more than 9 percent, a decline of at least 38 percent from the August rate, on our calculation. The next inputs are September consumer prices from the statistics agency in October and the central bank’s core reading that accompanies them, and any further administered price decisions, the channel through which the fiscal consolidation measures the bank lists as an upside risk, alongside regional hostilities, reach prices.
Sources: Central Bank of Egypt, CAPMAS, The Edge.
