Egypt’s Annual Core Inflation Eases to 14.1 Percent, Its Biggest Improvement in a Year
Annual core inflation in Egypt eased to 14.1 percent in September from 14.9 percent in August, the Central Bank of Egypt said on 11 October. The 0.8 percentage point step down was the largest one-month easing in the annual core rate in the 12 months before it, on our reading of the bank’s monthly releases since September 2025, and the first decline in the core rate since April.
Core Rate Eases 0.8 Points on a Favourable Base
The improvement came from the base. Core prices rose 0.8 percent month on month in September 2026, against 1.5 percent in September 2025, so a smaller monthly increase replaced a much larger one in the 12-month window. This year’s September rise was 53 percent of last year’s, on our calculation.
Carrying August’s 14.9 percent annual rate forward by September’s 0.8 percent monthly rise, and removing September 2025’s 1.5 percent, gives 14.1 percent, on our calculation.
Seen against the year’s path, core inflation climbed from 11.2 percent in January to 14.9 percent in August, a rise of 3.7 points. September’s easing reverses 0.8 of those points, or 22 percent of the climb, in a single month, on our calculation. The next two closest monthly improvements in the series were December 2025, when the core rate eased 0.7 points to 11.8 percent, and January 2026, when it eased a further 0.6 points to 11.2 percent.
Core Price Momentum Since April Is Less Than Half the Previous Six Months
The monthly readings show a clear slowdown through 2026. On our calculation, core prices rose 4.2 percent in the six months from April to September, less than half the 9.5 percent rise in the six months from October 2025 to March 2026. Annualised, the latest six months run at 8.5 percent.
The quarterly picture is sharper still. Core prices rose 6.3 percent in the first quarter, 3.0 percent in the second and 1.1 percent in the third, so the pace slowed in each quarter of the year. The third quarter is also the first of 2026 in which core prices rose less than in the same quarter of 2025, when the increase was 1.3 percent. Annualised, the third quarter’s pace is 4.5 percent, on our calculation, a measure of momentum rather than a projection of the annual rate.
Core Price Growth Slowed in Each Quarter of 2026
| Quarter | 2026 | 2025 | 2026 annualised |
|---|---|---|---|
| Q1 | 6.3% | 4.3% | 27.8% |
| Q2 | 3.0% | 2.6% | 12.7% |
| Q3 | 1.1% | 1.3% | 4.5% |
Quarterly rises compounded from the bank’s published monthly core readings; the annualised rate compounds each 2026 quarter over four quarters. All figures are our calculation.
The average monthly core reading from June to September was 0.35 percent, against 1.78 percent from January to May, on our calculation. Within that calmer stretch, September’s monthly reading did quicken: core prices rose 0.8 percent in the month, up from 0.3 percent in August and 0.0 percent in July, the fastest monthly increase since May’s 1.6 percent.
Core Runs 0.2 Points Above the Urban Headline Rate
Urban headline inflation, published a day earlier by the Central Agency for Public Mobilization and Statistics (CAPMAS), eased to 13.9 percent from 14.5 percent. With core at 14.1 percent, the core rate now runs 0.2 points above the headline, against 0.4 points in August, on our calculation.
For most of the past year the order was the other way round. Over the 13 months from September 2025, core ran above the urban headline in only 3: November 2025, August 2026 and September 2026. From December 2025 through July 2026 the headline rate was at or above core, with the widest margin in March, when headline stood at 15.2 percent and core at 14.0 percent, a gap of 1.2 points. The two rates were level at 14.3 percent in June.
Core Inflation Eased to 14.1 Percent as the Gap to the Headline Narrowed to 0.2 Points
| Month | Core | Urban headline | Core minus headline (pts) |
|---|---|---|---|
| Sep 2025 | 11.3% | 11.7% | -0.4 |
| Oct 2025 | 12.1% | 12.5% | -0.4 |
| Nov 2025 | 12.5% | 12.3% | 0.2 |
| Dec 2025 | 11.8% | 12.3% | -0.5 |
| Jan 2026 | 11.2% | 11.9% | -0.7 |
| Feb 2026 | 12.7% | 13.4% | -0.7 |
| Mar 2026 | 14.0% | 15.2% | -1.2 |
| Apr 2026 | 13.8% | 14.9% | -1.1 |
| May 2026 | 13.8% | 14.6% | -0.8 |
| Jun 2026 | 14.3% | 14.3% | 0.0 |
| Jul 2026 | 14.7% | 14.9% | -0.2 |
| Aug 2026 | 14.9% | 14.5% | 0.4 |
| Sep 2026 | 14.1% | 13.9% | 0.2 |
Annual rates as published in the bank’s monthly inflation releases; the urban headline series is compiled by the statistics agency. The gap in percentage points is our calculation.
In the month itself, urban headline prices rose 1.3 percent against 0.8 percent for core. Compared with a year earlier, the core rate is 2.8 points above September 2025’s 11.3 percent.
Deposit Rate Margin Over Core Widens to 4.9 Points
The overnight deposit rate stands at 19.00 percent, the overnight lending rate at 20.00 percent and the main operation rate at 19.50 percent, effective since 15 February 2026. The Central Bank of Egypt’s Monetary Policy Committee left all three unchanged on 24 September. Against core inflation, the deposit rate’s margin widened to 4.9 points in September from 4.1 points in August, the widest since May’s 5.2 points, on our calculation. Deflated by core inflation on a compounded basis, the deposit rate implies a backward-looking real rate of 4.3 percent, up from 3.6 percent in August; this is an analytical measure against past inflation, not a realised or expected return.
At that meeting the committee said inflation developments had “turned out more favorable than expected” and revised its forecast lower. It expects inflation to converge towards its target of 7 percent, plus or minus 2 points, during the second half of 2027, while judging the balance of risks to be tilted to the upside, through fiscal consolidation measures and international food prices.
Why it matters: The September core reading shows that the easing seen in the urban headline extended to the bank’s own core measure, and by more: 0.8 points against 0.6. Core momentum in the third quarter, at 1.1 percent, was the slowest of the year and below the same quarter of 2025, and with policy rates unchanged since February, each step down in core lifts the backward-looking real rate on the 19.00 percent deposit rate, now 4.3 percent on a compounded basis.
Outlook: The bank’s monthly inflation note is due on 15 October, and the Monetary Policy Committee meets on 29 October and on 17 December. The base stays supportive into October: core prices rose 2.0 percent in October 2025, so on our calculation any October 2026 monthly reading below 2.0 percent would bring the annual core rate lower again, and a repeat of September’s 0.8 percent would take it to 12.8 percent. That is arithmetic on the rounded published rates, not a forecast.
Sources: Central Bank of Egypt, CAPMAS, The Edge.
