Egypt’s inflation pressures broaden in Q1 as CBE diffusion index hits 18.3%

Inflation pressures in Egypt became more broad-based in the first quarter of 2026, with a larger share of goods and services recording sharp monthly price increases, according to the Central Bank of Egypt’s (CBE) Monetary Policy Report released Monday.

The central bank said its diffusion index — which measures the dispersion of inflation rates across items in the consumer price (CPI) basket — rose to an average of 18.3 per cent in the first quarter, up from 14.9 per cent in the fourth quarter of 2025 and above its historical average of 15.8 per cent.

The increase indicates that inflationary pressures are spreading across a wider range of goods and services, with more CPI components recording monthly inflation above 2 per cent, the report said.

“The uptick was primarily driven by higher inflation across volatile food, education-related services, and fuel products.” the report read.

The diffusion index is closely watched as an indicator of how concentrated or widespread inflation pressures are within the economy. A higher reading suggests that price increases are becoming more broadly embedded rather than limited to a small number of categories.

Attribution: Amwal Al Ghad English