According to a survey, non-oil private sector activity in Egypt declined for the 28th consecutive month in March. Import and currency restrictions and rising prices impact businesses
The S&P Global Egypt Purchasing Managers’ Index (PMI) fell marginally from February to March. Settling at 46.7 although being below the growth threshold of 50.0.
According to S&P Global economist David Owen, “at 46.7, the headline PMI showed a continued sharp deterioration in the performance of non-oil businesses,” with “steep declines in activity and new business volumes” being the source of the dip.
Despite the halfing of the Egyptian pound’s value since March 2022 and the signature of a $3 billion rescue plan with the International Monetary Fund in December, Egypt still faces a serious shortage of foreign currency.
According to the state statistics office, core inflation increased to 40.26 percent in February from 25.8 percent in January. Headline inflation reached a five-and-a-half year high of 31.9 percent in February.
In February, the overall input price index increased from 62.7 to 62.8. However, the purchase price index increased from 63.9 to 64.3.
According to S&P Global, “a sharp decrease in new orders” was the most obvious consequence of “severe inflationary pressures. Also the cause of a decline in client demand” on non-oil businesses.
In March, the sub-index for new orders decreased from 44.7 to 44.3. While the sub-index for output increased from 44.6 to 44.9.
According to S&P Global, “output levels in the non-oil private sector declined significantly in March. Import curbs and currency restrictions adding to the drop.
David Owen, an economist at S&P Global, said that both employment and inventory decreased.
Future output expectations rose to 54,2 from 52,5 in February, but they remain close to a record low.
S&P reports that while confidence for the next year has grown for the first time in three months, it remains “among the lowest recorded since the series began in early-2012.”
