Egypt non-oil activity drops for 26th month amid inflation

Egypt’s non-oil private sector activity contracted sharply in January, continuing a 26-month deterioration as high inflation and a continued shortage of foreign currency weighed on business, a survey showed on Sunday.

“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.

The Purchasing Managers’ Index (PMI) compiled by S&P Global, slipped to 45.5 in January from 47.2 in December, remaining below the 50.0 mark that marks growth in activity.

Amid steep drops in new orders and business activity, “firms made further cuts to purchasing and employment,” said David Owen, senior economist at S&P Global Market Intelligence.

Noteworthy, that the sub-index for output slid to 42.3 in January from 44.8 in December and that for new orders to 42.6 from 45.5.

Egypt is still short of foreign currency despite the Egyptian pound depreciating by nearly 50 percent since March and its signing of a new $3 billion rescue package with the International Monetary Fund (IMF) in December.