The committee also kept the discount rate at 27.75 percent.
On a global level, the CBE stated that the world economic outlook remains uncertain. Some central banks in advanced and emerging markets are lowering rates, while others are taking a more cautious approach.
While Egypt’s economic growth remains stable, it has not reached pre-pandemic levels. According to the statement, risks include a restrictive monetary stance that may dampen demand and rising protectionist policies impacting global trade.
Domestically, the statement revealed that the preliminary fourth quarter (Q4) of 2024 indicators show faster economic growth compared to Q3 of 2024, with GDP growth primarily driven by manufacturing and transportation.
According to the statement, the labour market also saw improvement, with the unemployment rate declining from 6.7 percent in Q3 to 6.4 percent in Q4 2024.
Driving factor: inflation!
Additionally, CBE attributed its action to the inflation trend, which showed a slower deceleration in the second half of 2024 and stabilized at 24 percent in January 2025.
“While food inflation is decelerating, non-food inflation remains high, averaging around 25.5 percent in 2024,” read the statement.
The statement also pointed out the upside risks to inflation that have increased due to geopolitical tensions and uncertain global trade policies.
However, CBE projected headline inflation to decline in Q1 2025, supported by the cumulative effects of monetary tightening and favourable base effects.
According to the statement, the MPC remains cautious but believes the current policy rates are appropriate to maintain a tight monetary stance.
CBE affirmed that future decisions will be made on a meeting-by-meeting basis based on evolving economic conditions. The MPC will continue monitoring developments and is prepared to use all available tools to achieve price stability.
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