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2025-11-03 16:38:47
[Central Bank of Egypt Expects Inflation to Fall to 10.5% in 2026] ⑴ The Central Bank of Egypt released its third-quarter monetary policy report, projecting an average inflation rate of 14% for the whole of 2025, which will further decline to 10.5% in 2026. ⑵ This represents a significant improvement compared to the 28.3% inflation level in 2024, with the 7% inflation target expected to be achieved by the fourth quarter of 2026. ⑶ The downward trend in inflation still faces upward risks both domestically and internationally, including a stronger-than-expected transmission effect from fiscal consolidation measures and a renewed escalation of geopolitical tensions. ⑷ The Central Bank forecasts that real GDP growth will rise to 4.8% in fiscal year 2025/2026 and accelerate to 5.1% in fiscal year 2026/2027. ⑸ Growth will primarily be driven by improvements in key sectors such as mining, manufacturing, and services, as well as the boost to private sector credit from monetary easing policies. ⑹ The forecast has taken into account the partial recovery of the Suez Canal economy and assumes that Red Sea shipping will gradually return to normal after the Gaza ceasefire. (7) Fitch Solutions raised its GDP growth forecast for Egypt in fiscal year 2025/2026 from 4.7% to 5%. (8) The International Monetary Fund raised its growth forecast for the same period from 4.1% to 4.5%, and the World Bank also slightly adjusted its forecast to 4.3%.
