THE IMPACT OF SOME ECONOMIC FACTORS ON THE INFLATION RATE IN EGYPT

ABSTRACT

This study investigates the primary economic determinants of inflation in Egypt from 1990–2023. The analysis determines how inflation relates to key economic factors by examining Egyptian inflation patterns. The research implements the ARDL framework to evaluate the direct as well as indirect relationships linking exchange rates with GDP and importing values with real interest rate variables. Research results show that increasing exchange rates and imports together generate 0.25 and 0.34 units of inflation increase, respectively. Conversely, a one-unit increase in both the interest rate and GDP leads to a decline in the inflation rate of about 1.04 and 0.08 units, respectively, consistent with established economic theory. A stronger GDP leads to more social products, thus lowering general market prices in economic systems. The research data implies establishing new economic guidelines to direct public funds toward profitable economic market segments. The policy would promote home manufacturing together with developing international market capacities while reducing imported goods. This investigation should be expanded with additional variables because institutional and international economic elements show new implications for inflation.