Egypt Private Sector Activity Slides for 26th Month in Row

Business

February 6th, 8:55am

Asharq Al-Awsat

Egyptian vegetable and fruit seller waits for customers at a popular market in Cairo, Egypt, January 18, 2023. REUTERS/Hadeer Mahmoud

A contraction in Egyptian non-oil private sector activity entered its 26th straight month as high inflation and a continued shortage of foreign currency weighed on business, a survey showed on Sunday. The S&P Global Egypt Purchasing Managers' Index (PMI) slipped to 45.5 in January from 47.2 in December, well below the 50.0 threshold that marks growth in activity. "The Egyptian non-oil economy suffered a sharp contraction in operating conditions in January, as a depreciation of the pound drove a rapid acceleration in price pressures," S&P Global said, Reuters reported. The PMI's sub-index for overall input prices climbed to 72.3 from December's 65.0 and that for purchase prices rose to 72.7, its highest reading since the months after Egypt devalued its currency by half after an earlier IMF agreement in 2016. The purchase price sub-index was at 64.3 in December. "Roughly half of all surveyed firms saw their purchasing costs increase since the end of last year, leading to a robust and quicker rise in overall expenses," S&P Global said. Headline inflation in Egypt surged to a five-year high of 21.3% in December, the state statistics organization reported last month. The increased inflationary pressures and the impact on demand led to a sharp contraction in output across the non-oil sector in January, S&P Global said. "Some firms added that import restrictions led to further supply shortfalls, which hindered activity and contributed to a sustained rise in backlogs of work."

from Asharq AL-awsat https://english.aawsat.com/home/article/4140596/egypt-private-sector-activity-slides-26th-month-row