Egypt’s annual inflation rate dropped to 23.4% in December 2024, down from 25% the previous month, according to the Central Agency for Public Mobilization and Statistics (CAPMAS). This decline was mainly driven by a 1.7% dip in food and non-alcoholic beverage prices, with vegetables showing the most significant drop of 14%.

Other food items like milk, cheese, eggs, fish, and meat also saw price reductions in December. However, not all categories experienced relief. Clothing and footwear prices increased by 1%, while housing, water, electricity, and fuel prices rose by 0.9%. Healthcare costs jumped 3.7%, and communication prices climbed a notable 10.2%.

The easing of inflation follows improved economic conditions, supported by major investments like the UAE’s Ras El-Hekma deal, which has significantly boosted Egypt’s recovery. Inflation had peaked at 38% in September 2023 but has been declining since then.

Looking ahead, Egypt’s economy is projected to grow between 3.5% and 4.5% in 2025, with international organizations like the IMF and World Bank forecasting growth rates of 4% and 3.5%-4.2%, respectively, for the coming years.

In addition to inflation improvements, net foreign reserves rose to $47.109 billion in December, up from $46.952 billion in November, according to central bank data. This growth has been consistent since June, supported by increased foreign investments and international financial aid.

Among the key contributors is a record-breaking $35 billion Ras El-Hekma investment deal with the UAE, signed in February, marking Egypt’s largest-ever foreign direct investment. Additionally, Egypt secured over $57 billion in financial assistance from international organizations, including an €8 billion loan program from the IMF and a €1 billion agreement with the European Union during the Egypt-EU investment conference.

The combination of declining inflation, rising reserves, and sustained foreign investments signals positive momentum for Egypt’s economy as it heads into 2025.