This decline could prompt authorities to begin easing their monetary policy either immediately or after February, the report added.

The report also indicated that the Central Bank of Egypt will reduce interest rates by 1200 points in 2025 to rein in inflation.

IMF expected that Egypt’s inflation to remain high in the short term but fall to an average of 21.2 percent in the current FY2024/2025 and keep its downward trend reaching 10.2 percent in FY2026/2027 when the government’s programme concludes.

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

The annual core inflation rate dropped to 24.4 percent in July, compared to 26.6 percent in June, the lowest since December 2022.

Egypt’s headline annual inflation rate kept its downturn path in June, for the fourth consecutive month, decelerating to 27.1 percent compared to 27.4 percent seen in May, according to the Central Agency for Public Mobilization and Statistics (CAPMAS).

The CBE has raised the key interest rates by eight percent (800 bps) since January, bringing the total hikes it has applied since March 2022 to 19 percent (1900 bps).