Prices rose 6.5 percent in the 12 months to August 2012.

Egypt's economy was battered by more than a year and half of political turmoil after Hosni Mubarak was toppled last year, and investors are still wary of a nation that in recent years had been a darling of frontier market investors.

The government of President Mohamed Mursi, elected in June, has been trying to draw back investors by pledging to ease the way for businesses and rein in a hefty budget deficit. It is in talks for a $4.8 billion International Monetary Fund loan.

"Egypt's headline inflation continues to slow down despite a pick-up in food inflation, suggesting that domestic activity remains slow," investment bank Beltone Financial said.

It noted in a report that food inflation rose to 9.3 percent year-on-year in September 2012, up from 8.2 percent a month earlier, reflecting rising global food prices.

"Inflation should start picking up again steadily until year-end as funds start flowing into Egypt and consumer confidence picks up," Beltone said.