CAIRO - Egypt's annual urban consumer price inflation rate fell to 24.1% year-on-year in December, as expected, from 25.5% in November, its lowest in two years, data from statistics agency CAPMAS showed on Thursday. 

Inflation began surging in 2022 following the Russian invasion of Ukraine, which prompted foreign investors to withdraw billions of dollars from Egyptian treasury markets. It reached a record high of 38.0% in September 2023 and was last this low in December 2022, at 21.27%.

The decline in December was broadly in line with expectations, with a median of 13 analysts in a Reuters poll having forecast it falling to 24.2%.

On a monthly basis, urban prices rose by 0.2% compared to 0.5% in November, CAPMAS data showed.

Food prices dropped by 1.5% in December after a 2.8% drop in November, putting them 20.3% higher than they were a year earlier.

Inflation has been fuelled largely by an expansion of money supply. Egypt's M2 money supply grew by 29% year-on-year in November, central bank data showed.

Egypt signed an $8 billion financial support package with the International Monetary Fund in March designed to help it narrow its budget deficit and adopt a less inflationary monetary policy.

(Reporting by Jana Choukeir; Writing by Patrick Werr; Editing by Nadine Awadalla and Bernadette Baum)