Egypt's non-oil private sector continues shrinking for the 23rd month in a row
Egypt’s non-oil private sector has continued to sharply contract in October, marking the 23rd consecutive month of decline, a report by S&P Global showed yesterday.
The S&P Global Egypt Purchasing Managers’ Index (PMI) recorded 47.7, the highest since last February, and slightly more than 47.6 in September. Yet, it is still below the 50-point threshold which separates growth from contraction.
The sector’s growth decline comes while a notable increase in goods and services prices is discouraging the country’s commercial activity, as well as a wide companies’ low confidence in profitability in 2023.
The report pointed out that the continued decline of new business and the severity of inflation in Egypt had led to a “decline in companies’ expectations of future production to a record level.”
“High prices, supply problems as well as weak global demand have led to a decline in new business and economic activities in Egypt,” the report read.
The economic survey pointed out that the continued deterioration in the Egyptian pound’s exchange rate against the US dollar had resulted in a “progressive increase in the costs of production inputs”.
Egypt’s pound recently liberated the local pound, which has led to a sharp depreciation of the currency against the American dollar. The move was justified by the Central Bank as “tied to new financing from the International Monetary Fund.”