Egypt’s Economic Recovery Loses Momentum as Inflation Figures Creep Back up
Egypt’s economy has shown some signs of irregularities, as its current inflation rate rose to 12.5% in October from 11.7% the month before.
This sort of fluctuation is not necessarily reflective of the North African country’s economy, given its steady recovery since the year began.
The Egyptian economy has recorded significant growth overall, compared to the previous year, and as a result, its inflation figures have been consistent since the midpoint of the year.
The country saw its inflation figures dip by half in February, marking its lowest levels since 2022, as its inflation rate fell to 12.8% from 24% in January.
The decline was the result of a year-long foreign currency shortage, which created an underground market for dollars before finally subsiding.
In 2024, officials let the country’s currency (the Egyptian pound) fall by more than 35% against the dollar and raised interest rates to a record high in March to ensure outside finances.
By May 2025, the International Monetary Fund (IMF) concluded that Egypt merely needs to broaden its revenue base to reinforce the progress it has made toward macroeconomic stability, following its visit to the North African country.
At the time, Egypt’s inflation had risen to 16.8%, from 13.9% in April.
By September, the Egyptian Prime Minister, Mostafa Madbouly, asserted that Egypt’s nagging economic challenges, particularly concerning debt repayment, had become a thing of the past.
The inflation figure for September was 11.7%, compared to 12% in August, which had come down from 13.9% in July, indicating a steady decline.
However, the October rate tells a different story, as the figures moved from 11.7% the month before to 12.5%, as a result of an increase in fuel prices.
As seen on Bloomberg, Egypt’s central bank has steadily lowered borrowing costs in 2025, including in early October, by a total of 625 basis points, in an effort to lower debt-servicing costs and stimulate investment, which is critical to economic growth.
The key interest rate remains high, at 21%, attracting foreign portfolio investors to the local debt market.
