RIYADH: Egypt’s annual urban headline inflation rate rose to 16.8 percent in May, up from 13.9 percent in April, driven primarily by continued non-food price pressures, according to official data.

Released by the Central Bank of Egypt, the analysis also pointed to a renewed uptick in food prices and challenging base effects, as the same period last year saw negative inflation.

These inflation trends come as Egypt’s broader economic landscape continues to be shaped by both domestic and global pressures. The government is navigating a delicate recovery amid external shocks, ongoing structural reforms, and efforts to manage public debt. Despite signs of resilience in credit and growth, inflation remains a key concern for both policymakers and households.

This backdrop helps explain Moody’s February decision to affirm Egypt’s Caa1 long-term foreign and local currency ratings with a positive outlook, citing improved prospects for debt servicing.

It also aligns with the country’s reported real gross domestic product growth of 3.9 percent in the first half of the current fiscal year, a signal of economic resilience, according to Prime Minister Mostafa Madbouly in May.

The newly released CBE report said: “The increase was particularly influenced by rising prices of pharmaceutical products and fresh fruits. Additionally, a moderate rise in inland transportation costs contributed to overall inflation, reflecting the second-round effects of April’s fuel price hike.”

It added: “Similarly, annual core inflation accelerated to 13.1 percent in May 2025 from 10.4 percent in April 2025. This increase reflects higher monthly core inflation, registering 1.6 percent in May 2025 compared to 1.2 percent in April 2025, as well as unfavorable base effects compared to the negative 0.8 percent recorded in May 2024.”

According to the financial institution, core inflation is a version of the headline consumer price index that removes the effects of short-term price shocks, allowing for a clearer view of long-term inflation trends by focusing only on stable, ongoing price changes rather than temporary fluctuations.

The report further indicated that monthly core inflation dynamics in May were influenced by rising prices in both food and non-food categories, such as engine oil, restaurant and café services, local transport, and housing rents. Seasonal effects linked to Eid Al-Adha also contributed, particularly with increased costs for Hajj and Umrah, clothing, and meat.

“Monthly core inflation recorded 1.6 percent in May 2025, reflecting the impact of previously mentioned changes in core CPI items. Retail items and services contributed to monthly core inflation by 0.74 and 0.68 percentage points, respectively, while core food contributed 0.22 percentage points,” the report said.

It also revealed that monthly urban headline inflation rose to 1.9 percent in May, up from 1.3 percent in April, primarily fueled by ongoing price pressures, along with increases in volatile food prices and public services such as inland transport and healthcare.

“Likewise, annual rural headline inflation increased to 16.2 percent in May 2025, compared with 13.1 percent in April 2025, with annual nationwide headline inflation rising to 16.5 percent in May 2025 from 13.5 percent in April 2025,” the CBE report said.

In May, Madbouly said that the country is preparing to transition away from its current economic reform program with the International Monetary Fund, which is scheduled to conclude by late 2026 or early 2027.

He said at the time that the government is developing a long-term national economic strategy that will extend to 2030 and focus on sustaining growth without relying on international institutions, according to an official release.   

The remarks come as Egypt works to stabilize an economy that has been strained by record inflation, a weakening currency, and rising debt. In recent years, the government has implemented reforms aimed at unlocking external financing, attracting Gulf-backed investments, and completing a record sale of state assets.

RIYADH: The UAE is set to achieve its 4 trillion dirhams ($1.089 trillion) target for non-oil foreign trade within two years and ahead of the original 2031 goal, according to the country’s vice president.

In a post on X, Sheikh Mohammed bin Rashid Al-Maktoum highlighted the country’s rapid economic progress, stating that key indicators have surpassed global benchmarks.

This acceleration in trade is mirrored in other areas of the economy. The UAE reported a 4 percent growth in gross domestic product in 2024, with non-oil sectors contributing 75.5 percent of the overall output as diversification efforts gained momentum.

“Our non-oil foreign trade increased by 18.6 percent year-on-year in the first quarter of this year (global average 2-3 percent) — Its volume in the first quarter of this year amounted to 835 billion dirhams. Our non-oil exports grew exceptionally by 41 percent on an annual basis,” Al-Maktoum stated.

He continued: “Our goal is to achieve non-oil foreign trade for the UAE amounting to 4 trillion dirhams by 2031 ... We will reach it within two years ... (four years before the scheduled date).”

Al-Maktoum, who also serves as prime minister, noted that non-oil exports recorded an exceptional year-on-year growth of 41 percent, signaling the country’s strengthening role in international trade.

He further noted that the non-oil sector now contributes 75.5 percent to the national economy, highlighting the country’s successful diversification strategy.

“These are new development indicators for the UAE,” he said, reflecting on the resilience and dynamism of the country’s economy despite global challenges.

Al-Maktoum credited UAE President Sheikh Mohamed bin Zayed Al-Nahyan for leading the country’s transformative economic journey, which he described as achieving “exceptional milestones in the history of the UAE.”

Other countries in the region are also advancing their trade and diversification agendas. 

Saudi Arabia is expanding its non-oil exports, which surged to SR515 billion ($137 billion) in 2024, a 13 percent year-on-year increase and a 113 percent rise since the launch of Vision 2030 in 2016.

Bahrain’s non‑oil sectors are also gaining momentum under its long‑term diversification strategy. In the third quarter of 2024, the non‑oil economy grew by 3.9 percent, accounting for 86.4 percent of real gross domestic product, driving an overall economic expansion of 2.1 percent year on year.