Egypt’s disinflation resumed in September on the annual measures the Central Bank of Egypt targets. Urban headline inflation fell to 13.9 percent from 14.5 percent in August, driven by non-food inflation easing to 18.0 percent from 19.5 percent, its lowest rate since January 2023, with services inflation down to 24.4 percent from 27.8 percent on easing rent inflation. Annual core inflation fell to 14.1 percent from 14.9 percent. Nationwide headline inflation was broadly stable at 12.8 percent, while rural inflation rose to 11.6 percent from 10.9 percent.
The monthly data point the other way. Monthly urban inflation was 1.3 percent in September, up from 0.1 percent in August, as monthly food inflation rebounded to 2.8 percent after three months of decline, with volatile food prices up 11.3 percent on a 17.8 percent jump in fresh vegetable prices. Annual food inflation rose to 7.2 percent from 6.3 percent, with core food at 5.2 percent, even as egg prices fell 19.6 percent year on year. Monthly core inflation was 0.8 percent, up from 0.3 percent in August.
The central bank attributed the annual improvement to favourable base effects and softening non-food inflation, and the composition supports that reading: regulated items inflation was nearly flat at 12.0 percent with no new fiscal consolidation measures in the month, and retail inflation was broadly stable at 12.2 percent. The September report therefore gives the easing narrative an annual rate still falling and a monthly rate that says the food component has not finished moving.