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Egypt’s Inflation Eases to 23.4% in December Amid Declining Food Prices

Prime Highlights:

Egypt’s inflation drops to 23.4% in December 2024, down from 25% in November.

The consumer price index stood at 239.7 points, reflecting a decrease mainly due to falling food prices.

Key Background:

Egypt’s annual inflation rate moderated to 23.4% in December 2024, down from 25% in November, signaling a gradual deceleration in the country’s price growth. This reduction was largely attributed to a decline in food prices, according to data from the Central Agency for Public Mobilization and Statistics.

The consumer price index (CPI) for Egypt reached 239.7 points in December, marking a slowdown in inflationary pressures. Key food categories witnessed significant price drops, with vegetables falling by 14%, dairy products, cheese, and eggs seeing a minor decrease of 0.7%, and fish and seafood prices declining by 0.6%. Meat and poultry experienced a slight dip of 0.1%.

However, certain non-food sectors saw upward pressure on inflation. Notable price hikes were observed in services such as telephone and fax (up 11%), fruit (up 7.5%), and medical products, devices, and equipment (up 5.5%). Additionally, prices for postal services, hotel services, and recreational activities also increased. Housing rents, transportation, and various utility costs, including oils and fats, saw modest price hikes ranging from 0.2% to 1.6%.

In parallel to the easing inflationary trend, Egypt’s banking sector has maintained resilience. The Central Bank of Egypt reported a capital adequacy ratio of 19.1% at the end of Q3 2024, well above the regulatory threshold of 12.5%. Furthermore, asset quality remained strong, with nonperforming loans at a low 2.4% of total loans, and provisions coverage for these loans stood at 87.4%. With robust liquidity levels and solid financial performance, the banking sector continues to play a crucial role in stabilizing the country’s economy.