Egypt is on track to experience its sharpest easing of inflation in almost three years, according to a forecast by professional services firm Ernst & Young, reflecting improving price stability and economic adjustment following a period of acute inflationary pressure.
Ernst & Young’s outlook comes against the backdrop of recent data showing consumer price increases moderating significantly from the highs experienced during the 2023–24 financial crisis. Annual urban inflation in Egypt dropped to around 12.3 percent in November 2025, marking one of the lowest readings in nearly three years and falling below several market expectations.
According to EY, one of the key drivers of this slowdown is exchange rate stability, which has helped limit the extent to which currency movements feed through to the cost of goods and services, thereby easing inflationary pressures. The firm highlighted that predictable foreign exchange conditions can contribute to a more balanced pricing environment and temper volatility in the cost of imports and everyday consumer items.
Looking ahead, EY also anticipates a gradual downward trend in interest rates in Egypt, in line with broader global monetary policy shifts toward more accommodative conditions. Lower policy rates could support expansion in bank credit, enhance borrowing capacity for businesses and households, and help stimulate domestic demand through increased consumption and investment.
Improving credit conditions combined with decelerating inflation could bolster business and investor confidence, creating a more favourable backdrop for sustainable economic activity and lending support to ongoing reforms. EY noted that this convergence of factors may help foster a more stable and resilient economic environment in the coming period.
This positive inflation outlook comes during a phase of transition from sustained volatility in Egypt’s economy toward more stable growth dynamics, as policymakers continue to calibrate monetary and fiscal measures to support macroeconomic balance and reduce inflationary risks.
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