The Central Bank of Egypt (CBE) lowered its inflation forecast, saying headline inflation should stabilise in Q3 2024 and fall toward a 7% target by late 2027.
What revision did the CBE make to its inflation outlook?
The bank said annual headline inflation is expected to level off in the third quarter of this year and then gradually decline, aiming for a 7% (+/-2%) rate in the second half of 2027.
Why did the CBE keep policy rates unchanged?
At its Monetary Policy Committee meeting, the CBE kept the overnight deposit rate at 19%, the overnight lending rate at 20% and the main operation and discount rates at 19.5%, marking the fifth consecutive meeting with no change.
What risks does the CBE cite for inflation?
The bank warned that regional hostilities, possible fiscal‑consolidation pass‑through and higher global food and energy prices could push inflation higher.
How does the bank describe the domestic economy?
Real activity grew 4.7% in Q2 2024, down from 5% in Q1, giving an average real GDP growth of 5.1% for FY2025/26 and an outlook of stability for FY2026/27.
What is the global context influencing the CBE’s decision?
Globally, activity slowed amid geopolitical volatility and weaker demand, while energy and agricultural prices rose due to regional tensions and supply concerns.
The CBE said the revised outlook reinforces a restrictive monetary stance, but upside risks remain, prompting continued caution on policy.