Moreover, the annual core inflation rate declined to 24.4 percent in July, compared to 26.6 percent in June, marking its lowest point since December 2022.

The monthly core inflation has also decreased for the fifth consecutive month, recording -0.5 percent in July 2024 compared to 1.3 percent in July 2023.

Source: CAPMAS.

The main difference between core inflation and headline inflation is that headline inflation refers to the inflation rate of all commodities. However, core inflation excludes food and fuel from the basket of goods and services.

Dissecting inflation rate
 

• There was a 2.2 percent rise in the prices of fresh fruits, while fresh vegetables witnessed an 18.9 percent increase. Together they make up 0.71 percentage points in the monthly headline inflation rate.
• The poultry prices decreased by 11.2 percent, contributing a negative 0.71 percentage points to the monthly headline inflation rate.
• The price of unrestricted rice decreased by 1.3 percent, contributing 0.02 percentage points to the monthly headline inflation rate
• The prices of oils and fats decreased for the fifth consecutive month by 0.7 percent, contributing a negative 0.02 percentage points to the monthly headline inflation rate.
• The prices of eggs and dairy increased by 4.3 percent and 0.3 percent, respectively, contributing 0.09 percentage points to the monthly headline inflation rate.
• The prices of fish and seafood have gone up by 0.8 percent, contributing 0.02 percentage points to the monthly headline inflation rate.
• Other staple food items such as sugar, tea, and legumes have contributed 0.04 percentage points to the monthly headline inflation rate.
• Consumer goods prices increased by 1 percent, contributing 0.13 percentage points to the monthly headline inflation rate.
• Services fees rose by 0.4 percent, contributing 0.10 percentage points to the monthly headline inflation rate
• Prices of administratively controlled goods and services increased by 0.3 percent, contributing 0.05 percentage points to the monthly headline inflation rate. This rise was mainly due to the increase in tobacco prices.

According to data from the CAPMAS, the Consumer Price Index (CPI), the price index used to measure the change in prices of a basket of goods and services over time, recorded 226.7 points in July, up from 225.6 points in June. Its lowest record was 181.1 points in January.

Although the Central Bank of Egypt (CBE) has set the inflation target at seven percent (±2 percent) in the fourth quarter of 2024, inflation is still in the double-digit zone.

Furthermore, the CBE's Monetary Policy Committee (MPC) announced in July that the key interest rates will remain unchanged, such as the overnight deposit rate, the main refinancing operations (MRO) rate, and the overnight lending rate at 27.25 percent, 27.75 percent, and 28.25 percent, respectively.

Mitigating inflation is a top priority in Egypt given its commitment under the $8 billion loan programme with the International Monetary Fund (IMF).

Thus, the CBE has raised the interest rates by approximately eight percent (800 bps) since the start of 2024.

Additionally, the IMF stated, during its third review of Egypt's EFF arrangement, that the tightened monetary policy currently adopted by Egypt will remain for the short term.