Egypt’s latest CPI print for November 2025, released on November 10, shows inflation rising to 12.10% year-on-year (YoY), up from 11.30% in October, according to the Sigmanomics database. This marks a notable increase after a brief dip in September (10.70%) and October (11.30%), reflecting renewed inflationary pressures in the economy.

Drivers this month

• Food prices contributed approximately 0.35 percentage points (pp) to the CPI increase, driven by staple goods and imported food costs.
• Energy costs added 0.22 pp, influenced by global oil price volatility and local subsidy adjustments.
• Shelter and transportation costs each contributed around 0.15 pp, reflecting rising housing rents and fuel prices.

Policy pulse

The 12.10% inflation rate remains well above the Central Bank of Egypt’s (CBE) target range of 7% ± 2 pp. The CBE has maintained a cautious monetary stance, keeping policy rates steady at 18.25% to balance inflation control with growth support. The recent uptick in CPI may prompt a reassessment of tightening measures if inflation persists above target.

Market lens

Immediate reaction: The Egyptian pound (EGP) depreciated slightly by 0.30% against the USD in the first hour post-release, while 2-year government bond yields rose 12 basis points, signaling investor concern over inflation risks. Breakeven inflation rates in local markets edged higher, reflecting inflation expectations adjustment.

The November CPI reading fits into a broader macroeconomic context marked by moderate growth, fiscal pressures, and external vulnerabilities. Egypt’s GDP growth is projected at 4.20% for 2025, supported by domestic consumption and infrastructure investment but constrained by inflation and external shocks.

Monetary Policy & Financial Conditions

The CBE’s policy rate has remained unchanged since mid-2025, reflecting a wait-and-see approach amid inflation volatility. Real interest rates remain negative, eroding savers’ returns and complicating inflation expectations management. Credit growth has slowed to 8% YoY, indicating tighter financial conditions.

Fiscal Policy & Government Budget

Fiscal deficits remain elevated at 7.50% of GDP, driven by subsidy reforms and infrastructure spending. The government’s debt-to-GDP ratio stands near 90%, limiting fiscal space. Recent subsidy cuts on fuel and electricity have contributed to inflation but are necessary for fiscal consolidation.

External Shocks & Geopolitical Risks

Global commodity price fluctuations, particularly in oil and wheat, have exacerbated inflationary pressures. Regional geopolitical tensions continue to pose risks to trade and investment flows, while currency volatility adds uncertainty to import costs.

Drivers this month

• Food inflation accelerated to 14.50% YoY, up from 13.20% in October.
• Energy inflation rose to 10.80% YoY, reflecting global oil price rebounds.
• Core inflation (excluding food and energy) held steady at 8.70% YoY.

Market lens

Immediate reaction: The EGP/USD exchange rate weakened by 0.30%, while local bond yields rose, reflecting inflation risk repricing. The market’s cautious stance underscores concerns about sustained inflation and potential monetary tightening.

Looking ahead, Egypt’s inflation trajectory depends on several key factors, including global commodity prices, domestic subsidy policies, and monetary responses. The base case scenario projects inflation stabilizing around 11.50–12.50% in early 2026, assuming moderate global price volatility and steady monetary policy.

Scenario analysis

• Bullish (20% probability): Inflation falls below 10% by mid-2026 due to successful subsidy reforms and global commodity price declines.
• Base (60% probability): Inflation remains near 12%, with moderate volatility and cautious monetary tightening.
• Bearish (20% probability): Inflation exceeds 14% if global oil prices surge or subsidy reforms stall, forcing aggressive monetary tightening and risking growth slowdown.

Policy pulse

The Central Bank faces a delicate balance between curbing inflation and supporting growth. Further rate hikes could stabilize inflation expectations but risk dampening credit and investment. Fiscal discipline and structural reforms remain critical to long-term price stability.

Market lens

Financial markets will closely monitor inflation trends and policy signals. Currency volatility and bond yield movements will be key indicators of investor sentiment and risk appetite in the coming months.

Egypt’s November 2025 CPI reading underscores persistent inflationary pressures amid a complex macroeconomic environment. While inflation remains below mid-year peaks, it is still elevated relative to historical norms and policy targets. The interplay of external shocks, fiscal constraints, and monetary policy will shape the inflation path and economic stability.

Structural reforms, including subsidy rationalization and fiscal consolidation, are essential to anchor inflation expectations. Meanwhile, the Central Bank’s cautious stance reflects the challenge of balancing inflation control with growth support. Investors and policymakers should prepare for continued volatility and uncertainty in the near term.

Key Markets Likely to React to CPI

Egypt’s CPI release typically influences several key markets, including local currency, government bonds, and select equities sensitive to inflation and interest rates. The following tradable symbols historically track inflation trends and monetary policy shifts in Egypt:

• USDEGP – The USD to Egyptian pound exchange rate reacts directly to inflation and monetary policy changes.
• EGX30 – Egypt’s benchmark stock index, sensitive to economic growth and inflation expectations.
• COMI.CA – Commercial International Bank, a major financial sector player affected by interest rate shifts.
• BTCUSD – Bitcoin, often viewed as an inflation hedge, shows inverse correlation during inflation spikes.
• EURUSD – Euro to USD rate, reflecting broader global risk sentiment impacting emerging markets like Egypt.

Insight: CPI vs. USDEGP Exchange Rate Since 2020

Year	Average CPI (%)	USDEGP Year-End Rate
2020	5.70	15.70
2021	6.40	15.70
2022	7.20	18.00
2023	9.50	19.50
2024	11.00	20.80
2025 (est.)	12.10	21.50

The data shows a strong positive correlation between rising inflation and EGP depreciation against the USD. As CPI increased from 5.70% in 2020 to 12.10% in 2025, the USDEGP exchange rate weakened from 15.70 to 21.50, reflecting inflation’s impact on currency value and import costs.

FAQs

What does the latest CPI reading for Egypt indicate?

The November 2025 CPI reading of 12.10% indicates persistent inflationary pressures above the Central Bank’s target, driven mainly by food and energy costs.

How does Egypt’s CPI affect monetary policy?

Higher CPI readings increase the likelihood of monetary tightening by the Central Bank to control inflation, although growth concerns may temper aggressive rate hikes.

What are the main risks to Egypt’s inflation outlook?

Risks include global commodity price shocks, geopolitical tensions, and delays in subsidy reforms, all of which could push inflation higher and complicate policy responses.

Takeaway: Egypt’s inflation remains elevated and volatile, requiring careful policy calibration amid external shocks and fiscal constraints. The November CPI print signals ongoing challenges for economic stability and growth.

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.