Continuing Deterioration for 17 Months.. An Inquiry Reveals an Economic Decline in Egypt

An investigation on Sunday showed that activity in Egypt’s non-oil private sector contracted last April and continued its 17-month deterioration as the Ukrainian crisis exacerbated price increases, Reuters said.

The Purchasing Managers’ Index in Egypt, published by Standard & Poor’s Global, rose to 46.9 from 46.5 in March, but is still below the 50.0 separating growth and contraction.

“While the decline was slight from March, it is still the second fastest decline in just under two years, with companies often reporting austerity measures due to higher input costs,” said S&P Global.

High global food and commodity prices continued to drive production down sharply and new orders, albeit at a slightly slower pace.

“The cost pressures are largely due to the surge in energy and commodity prices as a result of the war in Ukraine,” said Standard & Poor’s Global.

“Many participants also commented on the recent devaluation of the Egyptian pound. Despite the marginal decline, headline input price inflation was strong and remained above the average recorded in 2021,” she added.

The Central Bank allowed the pound to fall 14 percent against the dollar on March 21, after holding the currency almost constant for the past 18 months.

Production and new orders in April continued the months-long contraction, although the manufacturing index, at 45.3, was slightly better than the 44.6 recorded in March.

The new order index improved from 45.1 to 45.3.

The future manufacturing expectations sub-index also improved to 57.7 from 52.5 last March, when it was at its lowest level since it was first included in the survey 10 years ago. The April figure was still the third lowest in ten years.

“The ongoing war in Ukraine means companies are anticipating more price and supply challenges, leading to a different relatively pessimistic outlook for business activity,” said David Owen, an economist at Standard & Poor’s Global.

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