Egypt’s non-oil business activity shrinks for 16th consecutive month

Business activity in Egypt shrank for the 16th consecutive month in January as record-high inflation pushed up prices charged by businesses and sent employment to a four-month low, a survey showed on Sunday.

The Emirates NBD Egypt Purchasing Managers’ Index (PMI) for the non-oil private sector registered 43.3 points, well below the 50 mark that separates growth from contraction.

The index showed new orders dropping but at a slower pace of 39.2 points compared with 38 in December as inflation soared and the Egyptian pound weakened against the dollar.


Egypt has contended with a shortage of dollars that has made its black market the primary source of hard currency since a 2011 uprising scared off foreign investors and tourists, key sources of hard currency.

The central bank floated the pound on November 3 and it has since weakened sharply to around 18.75 per dollar.

"January’s survey provides little evidence that an economic recovery is yet under way at the start of 2017," said Jean-Paul Pigat, senior economist at Emirates NBD.


Underpinning the economic downturn were ongoing reductions in output, which continued to contract at 39.3 points, albeit at a marginally slower pace than in December.