Egypt’s annual urban consumer inflation rate eased to 14.9 percent in April, down from 15.2 percent in March, according to data released by the Central Agency for Public Mobilization and Statistics (CAPMAS). Monthly consumer prices rose 1.1 percent in April, with food and beverage prices declining 0.7 percent month-on-month, despite being 6.7 percent higher than the same period last year.

The slowdown in inflation defied market expectations, which had anticipated a rise due to ongoing geopolitical tensions. These tensions previously contributed to higher electricity prices early in the month, a weaker Egyptian pound, and escalating costs for commodities such as poultry. Inflation has dropped significantly from a peak of 38 percent in September 2023, a decline partly attributed to an $8 billion financial aid package agreed upon with the International Monetary Fund in March 2024.

However, inflationary pressures may intensify in the near term following a government decision on May 3 to increase natural gas prices for several energy-intensive industries, potentially pushing costs higher in the coming months.

Additional data from the Central Bank of Egypt showed a marked decline in the country’s net foreign assets, which fell by $6.07 billion in March to $21.34 billion. This represented the steepest monthly decrease since the outbreak of the recent conflict involving Iran. The drop came during the first full month after US and Israeli airstrikes on Iran, which have raised energy import costs, weighed on tourism revenues, and triggered significant capital outflows from Egypt as foreign investors pulled back from emerging markets amid heightened geopolitical uncertainties.

Net foreign assets had already begun to decline in February, falling by $2.12 billion from a record high of $29.54 billion reached at the end of January. Further analysis based on central bank figures indicated that commercial banks’ foreign assets decreased by approximately $3.59 billion in March, while the central bank’s foreign assets declined by $697 million. Meanwhile, net foreign liabilities rose across both commercial banks and the central bank.

Egypt’s net foreign asset position, which aggregates holdings at the central bank and commercial banks, turned negative in February 2022 when authorities intervened to support the Egyptian pound against the US dollar. The position returned to positive territory only in May 2024 after a significant currency devaluation two months prior.

Meanwhile, Egypt’s M2 money supply expanded by 20 percent year-on-year in March, reaching 1.5 trillion Egyptian pounds ($285 billion), up from 1.25 trillion pounds in March 2025, according to central bank data released on Thursday.