Egypt’s inflation hits 13.1% as PM warns of global trade war impact

Mostafa Madbouly promises no summer power cuts as government moves to shore up energy reserves

A market in Cairo. The increase in inflation was driven by a broad-based rise in food prices. EPA

Egypt’s headline inflation rate climbed to 13.1 per cent in March after dropping to 12.8 per cent in February, as food prices rose despite economic reforms.

The monthly consumer price index increased by 1.5 per cent to hit 250.6 points, according to data released by the country's statistics agency, Capmas, on Thursday.

The increase in inflation was driven by a broad-based rise in food prices, a critical component of the calculation. Fruit prices surged by 23.6 per cent, vegetables by 3.1 per cent, and meat and poultry by 2.8 per cent on a monthly basis.

Egyptian Prime Minister Mostafa Madbouly spoke about global economic challenges in Cairo on Wednesday. Photo: Egypt's cabinet

Dairy products, oils and sugar recorded smaller price increases, adding to the upwards pressure on household expenses.

Non-food categories also recorded price growth. Housing maintenance costs rose by 0.5 per cent, while rents climbed 1.2 per cent. Hospital service costs surged by 4.2 per cent and hotel services recorded a 2.2 per cent increase.

Some categories offered a respite to consumers. Tobacco prices dipped by 0.1 per cent while the cost of household appliances fell by 0.2 per cent. These modest declines, however, were insufficient to offset the overall rise.

The increased inflation comes against the backdrop of what Prime Minister Mostafa Madbouly described as a “full-scale global trade and economic war” on Wednesday. He warned that higher inflation in Egypt was probably an outcome of US President Donald Trump administration's latest tariffs and their global impact.

“We are entering a new era where long-held constants are being dismantled in favour of mechanisms aimed at globalisation and dismantling alliances to replace them with bilateral relations focused on maximising gains,” he said.

“What is taking place in the Egyptian market is a global trend. The central bank is closely co-ordinating efforts to manage the situation.” Mr Madbouly highlighted recent outflows of foreign capital from Egypt’s debt market, which has slowed since Sunday.

He also addressed concerns over electricity shortages, which drew widespread criticism last year when the government implemented rolling power cuts during peak summer months.

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The cuts, which lasted up to four hours a day in some areas, coincided with some of the hottest months in Egypt, forcing residents to endure stifling heat without air conditioning or fans. At the time, the government attributed the cuts to energy shortages caused by increased demand and limited supply.

Mr Madbouly reassured Egyptians on Wednesday that no power cuts were planned for this summer. He said that the government has been working to shore up energy reserves to meet demand during the hotter months.

“We are fully prepared to ensure the availability of energy during the summer,” he said. The government had prioritised securing essential supplies, including electricity, to avoid a repeat of last year’s crisis, he added.

The increase in inflation in March follows a period of relative stability in February, when inflation dropped sharply to 12.8 per cent, its lowest level since March 2022, from 23.2 per cent in January.

Analysts attributed the drop to base effects from the previous year, as well as temporary price stabilisation in certain categories. For example, food and beverage prices climbed 3.7 per cent in February compared to 20.8 per cent in January.

Experts warn that while inflation remains manageable compared to the highs of recent years, the steady price rise in March signals persistent structural challenges.

Inflation is expected to increase significantly by the end of the year when planned cuts to the country’s energy subsidies are implemented. Increases in fuel prices are typically accompanied by price hikes across all sectors of the economy.

The subsidy cuts are a key demand of the International Monetary Fund under its loan programme.

As the country grapples with these pressures, policy makers face the dual challenge of addressing inflation while maintaining growth. The March figures suggest that rising costs across essential categories will continue to strain household budgets in the months ahead.