Egypt’s headline inflation rate for November 2025 was reported at 12.50% YoY, up from 11.70% in October and exceeding the 12.00% consensus estimate, according to the Sigmanomics database. This marks a reversal after two months of easing from the mid-year peak of 16.80% in June. The inflation trajectory remains elevated compared to the 12-month average of 13.30% since March 2025.

Drivers this month

• Food prices surged 1.20% MoM, driven by wheat and vegetable shortages.
• Energy costs rose 0.80% MoM amid global oil price volatility.
• Currency depreciation pressures persisted, with the EGP weakening 2.30% against the USD in October.

Policy pulse

The Central Bank of Egypt (CBE) maintains a tight monetary stance, with the overnight lending rate steady at 18.75%. Inflation remains well above the 7% target, prompting expectations of further rate hikes if inflationary pressures persist.

Market lens

Immediate reaction: The EGP/USD spot rate depreciated 0.40% within the first hour post-release, while 2-year government bond yields rose 15 basis points, reflecting heightened inflation risk premiums.

Core macroeconomic indicators provide context for the inflation dynamics. Egypt’s GDP growth is projected at 4.20% for 2025, supported by strong exports and remittances. However, the fiscal deficit remains elevated at 7.50% of GDP, fueled by subsidy reforms and infrastructure spending. The government’s budget deficit widened slightly in Q3 2025, increasing inflationary risks.

Monetary Policy & Financial Conditions

The CBE’s monetary tightening since mid-2025 has aimed to anchor inflation expectations. Despite this, broad money supply (M2) growth remains robust at 18% YoY, sustaining demand-side inflation pressures. Credit growth to the private sector slowed to 9% YoY, reflecting cautious bank lending amid economic uncertainty.

Fiscal Policy & Government Budget

Fiscal consolidation efforts continue, but elevated energy subsidies and public wage increases limit progress. The government plans to reduce the deficit to 6.80% of GDP by end-2026, but external financing risks remain amid global tightening.

External Shocks & Geopolitical Risks

Global commodity price volatility, especially in oil and wheat, has exacerbated inflation. Regional geopolitical tensions and supply chain disruptions add uncertainty, pressuring the EGP and import costs.

Drivers this month

• Food inflation contribution: 0.45 percentage points (pp)
• Energy inflation contribution: 0.30 pp
• Core inflation excluding volatile items: steady at 9.80% YoY

Policy pulse

The inflation rate remains nearly double the CBE’s 7% target, underscoring the need for continued monetary vigilance. Market expectations price a 50% chance of a 50 basis point hike in the December policy meeting.

Market lens

Immediate reaction: The EGP depreciated 0.40% against the USD, while 2-year government bond yields rose by 15 basis points, reflecting increased inflation risk premiums. Inflation-linked securities saw a modest uptick in demand, signaling investor caution.

Looking ahead, Egypt’s inflation trajectory depends on multiple factors including monetary policy, fiscal discipline, and external developments. The base case scenario projects inflation averaging 11.50% in 2026, gradually easing as supply constraints ease and the EGP stabilizes.

Bullish scenario (20% probability)

• Global commodity prices decline sharply.
• EGP stabilizes or appreciates due to improved external balances.
• Inflation falls below 9% by mid-2026, enabling policy easing.

Base scenario (60% probability)

• Moderate easing of supply-side pressures.
• Continued gradual monetary tightening.
• Inflation remains elevated around 11-12% through 2026.

Bearish scenario (20% probability)

• Geopolitical shocks worsen supply chains.
• EGP depreciates further amid capital outflows.
• Inflation spikes above 14%, forcing aggressive rate hikes.

Monetary policy will remain data-dependent, balancing inflation control with growth support. Fiscal consolidation and external financing conditions are critical to anchoring inflation expectations.

Egypt’s November 2025 inflation rate of 12.50% YoY signals persistent macroeconomic challenges. Despite recent easing, inflation remains well above target due to supply shocks, currency pressures, and fiscal deficits. The Central Bank’s monetary stance will be tested as it navigates these headwinds. Financial markets are pricing in elevated risks, reflecting uncertainty over the inflation path. Structural factors such as subsidy reforms and currency management will shape Egypt’s inflation outlook over the medium term.

Policy coordination and external stability are paramount to achieving sustainable disinflation. Investors and policymakers should monitor commodity prices, exchange rates, and fiscal developments closely in the coming months.

Key Markets Likely to React to Inflation Rate YoY

Inflation data in Egypt significantly influences local and regional financial markets. Currency pairs, government bonds, and equities sensitive to inflation expectations tend to react sharply. Monitoring these markets provides insight into investor sentiment and policy outlook.

• USDEGP – The primary currency pair reflects inflation-driven currency depreciation risks.
• EGX30 – Egypt’s benchmark stock index reacts to inflation and monetary policy shifts.
• BTCUSD – Bitcoin often serves as an inflation hedge in emerging markets.
• ADCB – Regional bank stock sensitive to interest rate changes and inflation.
• EURUSD – Global risk sentiment and inflation expectations impact this major pair.

Inflation Rate YoY vs. USDEGP Exchange Rate Since 2020

This table illustrates a strong positive correlation between inflation and currency depreciation. As inflation rose from 5.70% in 2020 to 12.50% in 2025, the USDEGP exchange rate weakened from 15.70 to 19.10 EGP/USD, underscoring inflation’s impact on currency value and import costs.

Frequently Asked Questions

What is the current Inflation Rate YoY for Egypt?

The latest inflation rate for Egypt is 12.50% YoY as of November 2025, indicating a rise from 11.70% in October.

How does the Inflation Rate YoY affect Egypt’s economy?

Higher inflation pressures consumer prices, erodes purchasing power, and influences monetary policy decisions, impacting growth and investment.

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

Risks include global commodity price shocks, currency depreciation, fiscal deficits, and geopolitical tensions that could push inflation higher.

Takeaway: Egypt’s inflation remains elevated and volatile, requiring vigilant monetary and fiscal policy coordination to restore price stability and support sustainable growth.

Updated 11/13/25

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