The monthly inflation rate also declined by 0.6 percent in the same period, reflecting lower prices for several key food groups.
The nationwide consumer price index (CPI) registered 256.5 points in July, down 0.6 percent from June.
CAPMAS attributed the annual inflation slowdown primarily to a notable drop in the prices of meat and poultry by 1.3 percent and vegetables by 15.4 percent.
Mixed price movements across divisions
While some food items saw sharp declines, other consumer divisions recorded significant annual increases.
Alcoholic beverages and tobacco rose by 23.3 percent, driven by a 23.9 percent jump in alcoholic drinks and a 23.3 percent rise in tobacco prices.
Clothing and footwear prices climbed 14.6 percent due to increases in fabrics (12.2 percent), ready-made garments (15.2 percent), cleaning and repair services for clothing (17.5 percent), footwear (11.6 percent), and footwear repair (22.1 percent).
The housing, water, electricity, gas, and fuel division surged 20.4 percent, mainly on the back of higher actual rents (12.9 percent), housing maintenance and repair (14.2 percent), water and related services (3.4 percent), and a steep 43.6 percent rise in electricity, gas, and other fuels.
Household furnishings and equipment rose 11.1 percent year-on-year, led by price hikes in household textiles (16.6 percent), appliances (11.2 percent), glassware and utensils (12.7 percent), household and garden tools (15.4 percent), and home maintenance services (10.4 percent).
The healthcare division recorded one of the largest annual increases at 37.7 percent, reflecting a 52.4 percent rise in medical products and equipment, a 14.8 percent increase in outpatient services, and a 21.1 percent rise in hospital services.
Transport prices advanced 34.8 percent, fueled by higher costs for vehicle purchases (12 percent), private transport services (36.2 percent), and public transport (39.1 percent).
Communications also rose 11.2 percent, driven by postal services (42 percent), telephone and fax equipment (12.7 percent), and related services (11 percent).
Education services rose 10 percent, while restaurants and hotels increased by 15.1 percent. Miscellaneous goods and services climbed 13.5 percent, largely due to higher personal care product prices (15 percent) and personal effects (27.7 percent).
F&B remain volatile
The food and beverages (F&B) division, which has a heavy weight in the CPI basket, recorded a modest annual rise of 3 percent, despite sharp fluctuations within categories.
Prices of cereals and bread rose 4.3 percent; fish and seafood 11.3 percent; dairy, cheese, and eggs 4.6 percent; oils and fats four percent; fruit a staggering 44.8 percent; sugar and confectionery 3.3 percent; coffee, tea, and cocoa 6.3 percent; and mineral water, soft drinks, and natural juices 17.5 percent.
Drivers of the monthly drop
On a monthly basis, CAPMAS said the overall CPI decline was largely due to price falls in meat and poultry (-4.9 percent), fruit (-11 percent), vegetables (-7 percent), and personal effects (-0.5 percent).
This came despite increases in several categories, including cereals and bread (0.4 percent); fish and seafood (0.2 percent); dairy, cheese, and eggs (0.2 percent); oils and fats (0.1 percent); sugar and confectionery (0.2 percent); coffee, tea, and cocoa (0.2 percent); mineral water and juices (0.8 percent); alcoholic beverages (5.3 percent); and tobacco (7.8 percent).
Monthly increases were also seen in fabrics (0.4 percent), ready-made garments (0.3 percent), footwear (0.2 percent), housing rent (0.8 percent), housing maintenance (1.7 percent), household textiles (2.6 percent), appliances (0.6 percent), glassware and utensils (1.2 percent), garden tools (1.2 percent), outpatient services (0.8 percent), hospital services (1.1 percent), private transport services (0.3 percent), tourism trips (0.5 percent), hotel services (1.5 percent), and personal care products (1.2 percent).
Egypt has been grappling with persistent inflationary pressures over the past two years, driven by currency depreciation, global commodity price volatility, and domestic supply chain constraints.
The recent moderation in the headline rate offers some relief to households, particularly with food price declines in July.
However, analysts caution that upward risks remain, especially from energy costs, service charges, and the pass-through effects of past currency weakness. The government has pledged to continue efforts to stabilize prices, including measures to bolster local food production and monitor supply chains.
The Monetary Policy Committee (MPC) of the Central Bank of Egypt (CBE) is scheduled to convene on 28 August to review the key interest rates in light of the latest economic developments on the local and global fronts.
As the inflation rates in Egypt show moderation over the past months, the CBE has introduced 3.25 percent (325 bps) cuts to the key interest rates since the beginning of 2025.
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