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2026-05-25 14:00:04
[Central Bank of Egypt Expects Inflation to Accelerate in Q3, Maintains Interest Rates] (1) The Central Bank of Egypt expects overall inflation to accelerate in the third quarter of 2026 due to base effects, supply-side pressures from regional conflicts, exchange rate fluctuations, and fiscal adjustments. Average inflation in the fourth quarter is expected to remain above the target range of 7% ± 2%, and may only approach the target in the second half of 2027. (2) The Monetary Policy Committee maintained key interest rates unchanged for the second consecutive time: overnight deposit rate at 19%, overnight lending rate at 20%, and main business rate at 19.5%. Overall inflation in April fell to 14.9% from 15.2% in March, and core inflation fell to 13.8% from 14%. (3) Real GDP growth is expected to be around 5% in fiscal year 2025/2026, with growth slowing to 5% in Q1 of 2026 and further slowing in Q2 due to regional conflicts. The global economy faces upside risks such as geopolitical uncertainty, trade policy uncertainty, and supply chain disruptions.
