Morgan Stanley has projected that Egypt’s inflation rate will fall to between 14% and 15% by the end of the current year, with expectations of interest rate cuts beginning as early as February.

In a recent research note released after a recent visit, the US bank acknowledged the significant improvement in Egypt’s macroeconomic picture since March, but noted that local market participants remain cautious. The report cited concerns about the potential impact of additional fiscal measures, particularly anticipated energy price hikes, on inflation. 

While local consensus puts year-end inflation between 16 % and18%, Morgan Stanley’s forecast is more optimistic. The bank anticipates a cautious interest rate cut cycle by the Central Bank of Egypt (CBE), starting with a 100-200 basis point reduction on February 20th. Looking ahead to 2025, Morgan Stanley projects a total interest rate reduction of 10 percentage points, while local experts predict a less aggressive easing cycle of 6 percentage points.