Cairo – Mubasher: Egypt’s headline seasonally adjusted Purchasing Managers’ Index (PMI) retreated to 45.5 in January 2023 from 47.2 last December, according to the latest S&P Global PMI data.
The reading, which was below the 50 mark, highlighted a sharp deterioration in the non-oil sector that was one of the quickest registered in the current 26-month sequence of decline.
The non-oil economy witnessed a heavy contraction in operating conditions last January, as a plunge in the Egyptian pound led to a rapid acceleration in price pressures.
Additionally, purchase cost inflation soared to its highest level in more than four years, which made selling charges hike at the sharpest pace since February 2017.
The accumulation of inflationary pressures caused a remarkable drop in new business inflows, making firms to further lower activity, purchasing, and employment.
Firms projected a negative assessment for 2023, as output expectations fell to the third-lowest level in the series' history
David Owen, Economist at S&P Global Market Intelligence, pointed out: “The latest PMI survey data showed purchasing costs increasing at the sharpest rate in four-and-a-half years, as the pound's depreciation drove a further rise in import fees,” Owen said.
Owen said: “The surge in costs led to the largest rise in selling prices at non-oil firms since February 2017, suggesting that inflation could climb further from December's 21.3% and remain elevated throughout much of the year.”
He underlined: "The dollar shortage added significantly to Egypt's economic challenges in 2022 and will likely remain a major problem this year.”
“As such, business forecasts for the coming 12 months fell to their third-lowest on record, as firms predict supply and price-related issues to hamper demand further," the economist added.
