Egypt’s inflation slows for a third month as the IMF races a 15 December deadline

CAPMAS reported on 5 November that nationwide annual headline inflation eased to 12.0% in October from 12.8% in September, with monthly inflation at 0.6% and the national index at 296.1 points. Food and beverages rose 0.8% on the month, led by meat and poultry at 3.2% and dairy, cheese and eggs at 2.5%. The Central Bank published core figures on 9 November: annual core inflation slowed to 13.1% from 14.1%, while monthly core prices rose 1.2%, up from 0.8% in September. Annual urban headline inflation fell to 12.7% from 13.9%, its lowest since January, per CAPMAS. EnterpriseAM’s 10 November analysis notes JPMorgan had forecast 13.8%, judging that the pound’s 7.3% slide in October would add 0.8–0.9 percentage points to prices; the print came in more than a point below that call.

The Monetary Policy Committee raised rates by 100 basis points on 29 October, leaning on the monthly series rather than the annual one — specifically core inflation’s jump to 0.8% from 0.3%. October’s 1.2% extends that run to a third month. The same week, Reuters reported the IMF mission in Cairo was aiming to reach a staff-level agreement and bring it to the executive board before mid-December. The 46-month Extended Fund Facility Cairo entered in December 2022 was due to expire in October and has been extended to 15 December. MEES reported on 6 November that completion of the final reviews of the $8 billion EFF and the Resilience and Sustainability Facility would enable the release of roughly $2.3 billion — about $1.5 billion from the EFF and $800 million from the RSF, subject to board approval.

Assessment: Two things are being conflated by anyone reading the headline rate as a win. Disinflation here is substantially a base effect; the monthly core series, which is what the MPC actually watched when it hiked, is going the other way for a third consecutive month. A 100bp rise alongside a 7.3% one-month depreciation is not a central bank in control of its own timing. Julie Kozack framed the mission around “maintaining a tight monetary policy” and fiscal consolidation — language that reads as a floor under the hike, not a comment on it. Note what has not happened: no staff-level agreement has been announced. The target is a target. Jihad Azour’s phrasing — whether Cairo wants “another program or not” — is the open question, and nobody in Cairo has answered it.