Declining food prices help ease inflation further in July, says CBE

Cairo – August 20, 2025: Egypt’s inflation rate saw further relief in July, as food prices continued to decline, helping to counterbalance recent hikes in regulated goods like tobacco.

Data released by the Central Bank of Egypt (CBE) showed that annual urban headline inflation eased to 13.9 percent, down from 14.9 percent in June. This marks the second month in a row that inflation has retreated.

On a monthly basis, inflation in urban areas fell by 0.5 percent, compared to a 0.1 percent decrease in June. In contrast, the same month last year had seen a 0.4 percent increase. The monthly drop was largely driven by lower prices in essential food categories—particularly fresh produce and poultry—supported by improved availability and supply chain conditions.

Core inflation, which excludes items with volatile prices such as food and energy, remained relatively stable. It reached 11.6 percent year-on-year in July, compared to 11.4 percent in June.

On a monthly basis, core inflation declined by 0.3 percent, continuing the deflationary trend seen the previous month. This was driven by a notable 3.0 percent drop in core food prices, which reached their lowest level since December 2018.

Fresh fruit and vegetable prices fell by 11.5 percent, contributing a –0.73 percentage point impact on monthly headline inflation. Poultry prices also dropped by 9.1 percent, in line with seasonal patterns, pushing monthly inflation down by another –0.46 percentage point. In contrast, dairy products saw a mild increase of 0.4 percent.

Regulated prices rose 2.1 percent overall, primarily due to a sharp 7.9 percent rise in tobacco prices following tax adjustments implemented at the beginning of the month. This increase added 0.46 percentage point to monthly inflation. In Egyptian pounds, the average index for tobacco and related products surged from LE 120.61 in July 2024 to LE 351.77 in July 2025.

Service prices also climbed by 0.5 percent, largely due to higher costs for rent, restaurants, and cafés, contributing 0.14 percentage point to the overall inflation rate. Retail items such as clothing, personal care products, and household cleaning supplies rose by 0.35 percent, adding a smaller 0.05 percentage point.

Outside urban areas, rural headline inflation followed a similar trend, falling to 12.4 percent in July from 13.9 percent the previous month. On a national scale, inflation declined to 13.1 percent, compared to 14.4 percent in June.

A closer look at expenditure categories reveals the varying degrees of inflation. Food and beverages, which make up 32.73 percent of the consumer basket, saw a monthly price drop of 2.98 percent, resulting in a modest annual increase of just 3.41 percent. In contrast, tobacco prices skyrocketed by nearly 192 percent year-on-year. Medical care rose 38.4 percent annually, and transportation saw a 41.5 percent increase.

Core CPI, which represents around 73.09 percent of the overall index, fell by 0.33 percent from June to July, with food contributing –0.59 percentage point to that figure. Services and retail items added 0.19 and 0.07 percentage point, respectively.

In monetary terms, the overall consumer price index (CPI) moved from LE 222.09 in July 2024 to LE 252.86 in July 2025. Core CPI increased from LE 219.99 to LE 245.48 over the same period.