Egypt’s inflation eased again in May, but the details offer little comfort for households and investors hoping the country’s price shock is firmly in the past.
Data released on Wednesday by the Central Agency for Public Mobilisation and Statistics (CAPMAS) showed urban consumer inflation slowed to 14.6% in May from 14.9% in April, marking its lowest level since February, when it stood at 13.4%.
Nationwide inflation also eased, falling to 13.0% from 13.4%. Yet the broader picture remains more complicated. CAPMAS said the overall consumer price index rose 1.4% month on month to 292 points, driven by fresh increases in food, housing, clothing, transport and telecommunications.
For policymakers, the figures reinforce that Egypt remains in a disinflation phase following the severe inflation crisis of 2023 and 2024. For families, however, the cost of everyday essentials continues to climb.
Food and housing pressures remain stubborn
Food prices led the latest monthly increase. CAPMAS said the food and beverages category rose 2.1% in May alone, reflecting a 3.5% increase in meat and poultry prices, a 1.3% rise in fish and seafood, and a 12.7% jump in fruit prices.
Cereals and bread rose 0.3%, while oils and fats increased 0.5%. Dairy products, cheese and eggs offered rare relief, falling 1.8% month on month.
The annual picture remains equally challenging. Food and beverages were 7.5% higher than a year earlier. Grain and bread prices rose 2.6%, meat and poultry increased 3.8%, fish and seafood climbed 5.0%, while oils and fats were up 4.8%.
Vegetables were the standout pressure point, surging 46.4% year on year. Coffee, tea and cocoa rose 9.1%, while bottled water, soft drinks and juices increased 6.8%, according to CAPMAS. Housing costs also continued to weigh heavily on consumers.
The housing, water, electricity, gas and fuel category rose 2.0% from April, driven by a 3.1% increase in rents, a 0.8% rise in home maintenance spending and a 1.0% increase in electricity, gas and fuel costs.
Compared with a year earlier, housing and utilities costs were 30.8% higher. Rents rose 26.3%, while home maintenance and repair expenses recorded double-digit increases.
The figures come weeks after the government raised electricity tariffs for higher-consuming households and commercial users as part of efforts to reduce subsidy costs amid volatile global energy markets.
At the time, authorities said households consuming up to 2,000 kilowatt-hours monthly would be protected, while heavier users and businesses would face increases of around 16% to 20%.
The May data suggest those adjustments are already feeding through into housing and services costs even as headline inflation continues to cool.
Other categories also recorded steady increases.
Clothing and footwear rose 1.4% during the month, with fabrics and ready-made garments both up 1.7%. Furniture and household equipment increased 1.2%, while restaurants and hotels recorded a 1.1% rise, reflecting higher prices for prepared meals.
External shocks threaten Egypt’s inflation path
One of the sharpest monthly increases came from telecommunications.
“The Telecommunications Division recorded an increase of (9.7%) due to the increase in the prices of the Telephone and Fax Services Group by (10.4%),” CAPMAS said.
While the impact may not yet be fully reflected in household budgets or business operating costs, economists expect higher telecom charges to filter through the economy in the coming months.
Annual inflation data reveal similar pressures across key sectors. Clothing and footwear were 13.1% more expensive than in May 2025, while furniture, home equipment, and maintenance costs rose 12.3%. Healthcare prices increased 5.3%.
Transport costs were up 21.4% year on year, reflecting higher vehicle prices, private transport expenses and transport services. Education fees climbed 20.0%, while restaurant and hotel charges rose 13.4%.
Despite those increases, inflation remains far below the crisis peaks of recent years. Urban inflation reached nearly 38% in September 2023 before gradually easing through 2024 and into 2025, helped by an IMF-backed reform programme, currency adjustments and aggressive monetary tightening by the Central Bank of Egypt.
Yet analysts caution that the path back to price stability remains fragile. The central bank has repeatedly stated its goal of reducing inflation to around 7% by the fourth quarter of 2026 but has also warned that risks remain tilted to the upside.
In April, the Monetary Policy Committee left benchmark interest rates unchanged following earlier cuts and warned that “the inflation path and subsequently the CBE’s target of 7% (± 2 p.p.), on average, in Q4 2026 have become increasingly subject to upside risks.”
Officials linked those risks to regional instability and the stronger-than-expected impact of fiscal reforms and subsidy reductions.
The escalating US-Iran conflict has emerged as the most significant external threat. The confrontation has unsettled global energy and shipping markets while increasing pressure on emerging economies across the Middle East and North Africa.
