Egypt's inflation edges to 12.8% as Fitch keeps B rating

Egypt's annual inflation rate across the whole republic reached 12.8% in September, up from 12.7% a month earlier, as the general Consumer Price Index climbed 1.5% month-on-month to 294.2 points. The figures come from the Central Agency for Public Mobilization and Statistics.

The headline urban rate that the Central Bank of Egypt monitors most closely moved the other way, easing to 13.9% from 14.5% in August. The two series cover different baskets and different geographies, so they can diverge in the same month.

Food drives the monthly gain

Food and beverages did most of the work in September, with prices up 3.2% on the month. Vegetables led at 15.1%. Fruit followed at 2.6%, and meat and poultry at 2.5%. Prices also rose for clothing, housing-related expenses and household furnishings. Two groups bucked the trend: audiovisual and photographic equipment slipped 1.1%, and organised tour prices fell 0.6%.

Annual gains led by housing and transport

Measured against September of last year, the pattern looks different. Housing, water, electricity, gas and fuel recorded the largest increase among the main expenditure groups, at 29.6%. Transport and communications rose 21.3%, education 20%, and food and beverages 7.9%. Within the food basket, vegetable prices were up 30.9% year-on-year.

The monthly and annual readings answer separate questions. A 1.5% monthly rise means prices are still climbing at a pace that, on its own, would not pull the annual rate down quickly. September's yearly figures show the heaviest pressure sitting in services and administered prices rather than in the food basket, where the increase stayed below the headline even as vegetables remained the most volatile component.

Fitch holds Egypt at 'B'

On Thursday, Fitch Ratings affirmed Egypt's long-term sovereign credit rating at 'B' with a Stable Outlook. The agency pointed to stronger foreign-exchange reserves, resilient economic growth and continued international financial support. It also flagged elevated debt-servicing costs and inflation as ongoing weights on the credit profile.

Growth is forecast at 4.7% in fiscal 2027, down from 5.1% in fiscal 2026, as higher living costs restrain consumption and investment. Fitch expects inflation to average 12.3% in fiscal 2027, compared with 11.6% in fiscal 2026.

The agency anticipates another rise in domestic fuel prices during the fourth quarter of 2026, after the adjustments made in March. It projects inflation will drop below 10% in fiscal 2028, supported by tighter monetary policy, exchange-rate flexibility and lower commodity prices.