The World Bank has forecast that Egypt's inflation rate will reach 14.2% in the current fiscal year, up from 13.3% in the previous fiscal year. This projection is part of the bank's regional economic update for the Middle East, North Africa, Afghanistan, and Pakistan. The report highlights that Egypt's inflation rate has remained relatively stable since the start of the conflict in the region, but it remains higher than the average for the Middle East and North Africa.
According to the World Bank, Egypt's inflation rate was 20.9% in the 2024/2025 fiscal year. The bank notes that the country's inflation rate has been influenced by global economic trends, including the impact of the conflict on energy prices and supply chains. The report also highlights that many governments in the region have implemented policies to mitigate the effects of rising prices, including price controls, tax reductions, and subsidies.
The World Bank's report notes that inflationary pressures have increased in most economies in the region since the start of the conflict, but the extent of the increase has varied between countries. The bank also observes that fuel prices in many countries remain subject to government regulation or subsidies, which has helped to limit the impact of global price increases.
The World Bank warns that while government policies to support households may delay or reduce the impact of inflation, they also transfer part of the cost to public budgets. The bank notes that companies may initially absorb higher transportation costs and production inputs by reducing their profit margins, especially in a weak demand environment.
The World Bank's report also highlights that the conflict has had a significant impact on inflation expectations globally. The bank notes that inflation expectations for oil-importing developing countries have increased to 6.6% in September, up from 5.3% before the conflict. In contrast, inflation expectations in Gulf Cooperation Council countries and Iraq have increased to 2.7%, up from 1.8% previously.
The World Bank's forecast for Egypt's inflation rate is part of a broader regional economic update. The bank's report notes that the conflict has had a significant impact on the economic outlook for the Middle East and North Africa, with many countries facing challenges related to inflation, unemployment, and economic growth.
The World Bank's report concludes that the persistence of high energy costs and shipping costs will make the inflationary impact of the conflict more persistent. The bank warns that this could limit the scope for interest rate cuts and keep interest rates high for longer, which could have implications for companies and households.
Key points
- Egypt's inflation rate is expected to reach 14.2% in the current fiscal year.
- The World Bank notes that inflationary pressures have increased in most economies in the region since the start of the conflict.
- The bank warns that government policies to support households may delay or reduce the impact of inflation, but also transfer part of the cost to public budgets.
