Egypt Urban Inflation Slows to 13.9% in September as Central Bank Holds Rates

Egypt's annual urban inflation rate cooled to 13.9% in September 2026, down from 14.5% in August. However, monthly consumer prices rose 1.3%, accelerating from a 0.1% increase in August. The monthly uptick was driven largely by a 15.1% jump in vegetable prices, alongside smaller gains in meat, seafood, dairy, housing rentals, and healthcare services. Across the entire nation, annual headline inflation edged up slightly to 12.8% from 12.7%.

The cooling annual rate reflects broader progress toward price stabilization, prompting the Central Bank of Egypt to lower its medium-term inflation outlook. The central bank anticipates annual headline inflation to hold steady during the third quarter of 2026 before steadily trending toward its target of 7% (plus or minus 2 percentage points) by the second half of 2027. To support this trajectory, policymakers opted on September 24 to maintain key interest rates for a fifth consecutive meeting, keeping the overnight deposit rate at 19% and the overnight lending rate at 20%.

While monetary policy remains restrictive to curb price pressures, policymakers warned of upside risks to the inflation trajectory. Potential pressures include ongoing regional conflicts, higher global food costs, and the pass-through effects of domestic fiscal consolidation measures. Investors will monitor upcoming monthly price readings and global commodity trends to see if inflation stays on track toward target.