Inflation inches up again in April on fuel subsidy cuts

Latest reading: Inflation accelerated for the second month running in April—after a five-month streak of moderations—coming in at 13.9% from March’s 13.6%. Looking at the details of the release, the uptick was largely due to faster increases in prices for transport; a cut in fuel subsidies on 11 April—as part of IMF-backed reforms—was behind the faster increase. March and April’s data will likely only be a blip in the downward trend, largely reflective of the gradual fading of the low base effect. Still, the trend pointed down, with annual average inflation coming in at 22.4% in April (March: 24.0%). Lastly, consumer prices increased 1.34% in April over the previous month, slowing down from March’s 1.65% rise.

Outlook: Despite March and April’s rises, our panelists still expect inflation to average below January–March levels in April–June and to gradually soften through October–December 2026, sitting at the top of the Central Bank of Egypt’s (CBE) 5.0–9.0% target for the quarter. Price pressures will be contained by past interest rate increases, a high base of comparison, a more stable Egyptian pound and milder private consumption growth. Accordingly, recent data is unlikely to stir the Central Bank of Egypt (CBE) away from further interest rate cuts when it reconvenes again on 22 May. Overall in calendar year (CY) 2025, our Consensus is for inflation to nearly halve from the prior year’s level, and to continue trending down through CY 2028—although at a gradually slower pace as the high base effect fades.

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