The Central Bank of Egypt (CBE) headquarters, Cairo, Egypt. AP
The CBE attributed the slowdown to a 1.2 percent drop in the monthly core Consumer Price Index (CPI) in January, compared with declines of 1.7 percent in January 2025 and 0.2 percent in December 2025.
Meanwhile, the Central Agency for Public Mobilization and Statistics (CAPMAS) recorded that the annual headline inflation eased to 10.1 percent in January 2026, down from 10.3 percent in December 2025.
Monthly, the headline CPI rose to 268.1 points in January, a 1.5 percent increase from 264.2 points in December, mainly due to a 2.7 percent rise in food and beverage prices.
Furthermore, the CBE forecasted that inflation will decline further in 2026, as Egypt gets closer to achieving the bank’s inflation target of 7 percent ±2 percentage points by the end of the year.
Inflation has been recording a constant decline since the CBE raised its interest rates by six-percent in March 2024.
The move aimed to contain high inflation, curb spikes in US dollar rates in parallel markets, stabilize prices in the local market, bolster hard currency liquidity, improve remittance inflows, and safeguard Egypt’s monetary stability.
It also aligns with the terms of Egypt’s agreements with the International Monetary Fund (IMF), including the $8 billion Extended Fund Facility (EFF) and the $1.3 billion Resilience and Sustainability Facility (RSF), both scheduled for review in the first quarter of 2026 after a staff-level agreement in December 2025.
Moreover, the IMF predicted in October 2025 that Egypt’s inflation rate is expected to fall sharply to 11.8 percent in FY2025/26, from an average of 20.4 percent in FY2024/25, reflecting the country’s efforts to tighten monetary policies.
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