Contract Egypt non-oil activity hits 29th as optimism wanes

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CAIRO (Reuters) – Egypt’s non-oil private sector activity contracted for the 29th straight month in April. Business confidence hit an all-time low as import and currency restrictions continued and soaring prices pushed business confidence to an all-time low, a survey on Wednesday showed.

The S&P Global Egypt Purchasing Managers Index (PMI) improved from 46.7 in March to 47.3 in April, but well below the 50.0 threshold for growing activity.

“Import restrictions and overall higher prices continued to weigh on inventories, while persistent economic weakness led to the most pessimistic outlook in the history of the survey,” S&P Global said.

Egypt has not allowed its currency to move against the dollar, despite pledging to do so in a $3 billion aid package with the International Monetary Fund signed in December, pledging to Sales of state-owned assets worth billions of dollars are stalling.

Headline inflation rose to a nearly all-time high of 32.7% in March from 31.9% in February, and core inflation jumped to 39.5% after jumping to a record 40.26% in February, the State Bureau of Statistics reported. has dropped to %.

The PMI sub-index for overall input prices fell to 58.7 from 62.8 in March, while that for purchase prices fell to 59.9 from 64.3.

“The findings suggest that headline inflation in Egypt will start to soften in the coming months after hitting a six-year high of 32.7% in March,” said David Owen, economist at S&P Global. and will help alleviate the cost of living crisis.” He said.

“Weak customer demand linked to high inflation continues to play an important role in the decline in sales, according to companies surveyed,” S&P Global said. “Restrictions on imports were also still cited by firms as an impediment to production capacity levels.”

The new orders sub-index strengthened to 45.2 from 44.3 in March, while the output sub-index rose to 45.4 from 44.9.

“Manufacturing, wholesale, retail and services recorded declines in output and new construction, while construction posted its first gain in 10 months,” S&P Global said.

The future output expectations sub-index eased to a record low of 51.4 from 54.2 in March.

“Companies show that the trajectory of future activity remains highly uncertain due to weak domestic and international demand and high price levels,” S&P said.

Reported by Patrick Werr.Edited by Toby Chopra

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