Cityscape in Egypt

Egypt Inflation November 2023

Egypt: Inflation slows to six-month low in November

Inflation fell to 34.6% in November from October’s 35.9%. November’s reading represented the weakest inflation rate since May. Looking at the details of the release, prices for food and non-alcoholic beverages rose at a softer rate in November, outweighing a more rapid increase in transportation prices.

Still, the trend pointed up, with annual average inflation coming in at 32.9% in November (October: 31.7%). Meanwhile, core inflation fell to 35.9% in November from the previous month’s 38.1%.

Finally, consumer prices rose 1.30% in November over the previous month, accelerating from October’s 1.04% increase.

Despite November’s modest softening, headline inflation was still nearly four times the upper bound of the Central Bank of Egypt’s 5.0–9.0% target band. That said, it came in slightly below market analysts’ expectations. November data allows for cautious optimism: Headline inflation slowed for the second straight month from its record high of 37.9% in September, while core inflation eased for the fifth consecutive month.

In calendar year (CY) 2024, inflation is set to average below that of the prior year due to a more favorable base of comparison, slower activity and the delayed effects of higher interest rates in CY 2023. That said, it will remain above target. A weaker Egyptian pound—especially in the parallel market—in 2024 poses an upside risk, while prices for key commodity imports like wheat are a factor to watch.

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