EGYPT’S annual urban consumer inflation rate accelerated to 12.5 per cent in October, up from 11.7pc in September, marking an end to a four-month downward trend, reports Economy Middle East.
This increase was driven chiefly by higher fuel prices and a new rent law impacting housing costs, affecting daily consumer expenses across the country.
According to data from Egypt’s official statistics agency CAPMAS, as reported by Reuters, the inflation rate for urban consumers increased sharply to 12.5pc in October, up from 11.7pc in September. The monthly inflation rate remained stable at 1.8pc. This rebound came after several months of declining inflation, which had eased from a high of 13.9pc in April 2025.
The October increase reversed a trend of moderating inflation that had been ongoing since mid-2025, as earlier months saw easing pressures primarily due to slower food and beverage price increases. The prior downward path was helped by declining prices in categories such as transport, restaurants, clothing, and miscellaneous goods, although housing and furnishings had shown gradual price upticks.
A significant factor behind the October inflation jump was a government decision in mid-October to raise fuel prices by nearly 13pc. Fuel price hikes typically ripple through the economy due to their impact on transportation costs and goods production, contributing notably to consumer price rises. Analysts pointed to this increase as a key contributor to the renewed inflation acceleration in October.
Additionally, a new law allowing landlords to increase monthly rent payments took effect in early August, with the first rent hikes appearing in inflation statistics from September onwards. Given the high weight of housing costs in the consumer price index, these rent increases contributed to pushing inflation higher in October following the initial impact seen in the previous month.
Egypt’s inflation landscape has been shaped over recent years by several external and domestic factors. Inflation spiked dramatically to 38pc in September 2023 amid currency devaluation, global commodity price shocks triggered by the Russia-Ukraine conflict, and capital outflows. Since then, decisive policy actions such as currency management, interest rate hikes totalling 600 basis points, and an $8 billion IMF support program have helped temper inflation pressures considerably.
Despite the October uptick, inflation remains below the peak levels seen in 2023 and even early 2025. The Central Bank of Egypt is expected to keep interest rates steady in the near term, partly due to the latest inflation figures indicating stabilisation but with caution warranted given recent fuel price pressures.
The rise in inflation in October affected various consumption items. Food prices continue to be a significant factor, with some categories like fruits, fish, dairy, oils, sugar, and beverages seeing notable price increases contributing to overall inflation. The increase in fuel and housing costs also weighed heavily on household budgets, positioning these sectors as key inflation drivers alongside staple food products.
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