Inflation in Egypt Climbs to 27.0%

CAIRO (Reuters) – Inflation in Egypt is estimated to have climbed to 27.0% in October, driven by higher education costs and a fuel price increase in mid-month, according to a poll released on Wednesday.

The median forecast from 17 analysts anticipated that annual urban consumer inflation would rise to 27% last month, up from 26.4% in September, marking the third consecutive month of inflation increases.

Data was collected between Oct. 31 and Nov. 6. Sri Virinchi Kadiyala of ADCB noted that the increase in October would primarily stem from expected revisions in education costs, typically accounted for in October.

In March, Egypt secured an $8 billion financial support package from the International Monetary Fund, aimed at helping the country adopt less inflationary monetary policies, which required raising many domestic prices.

Egypt's M2 money supply saw an unprecedented 29.59% year-on-year increase in September, according to central bank data, contributing to inflation.

Annual inflation received a boost from fuel hikes of 10-15% at the end of July and an additional 11-17% increase in mid-October, a 25-33% jump in metro ticket prices at the start of August, and a 21-31% rise in electricity tariffs in August and September.

Inflation had gradually decreased from a record high of 38.0% in September 2023. The central bank's lending rate stands at 28.25%, turning positive in July for the first time since January 2022.

James Swanston of Capital Economics expressed that inflation is expected to slow in Q4 and sharply in Q1 2025, enabling the central bank to initiate a monetary loosening cycle.

(Polling by Veronica Khongwir and Rahul Trivedi; Writing by Patrick Werr; editing by Mark Heinrich)