Egypt's non-oil private sector PMI drops slightly in March

As per the report on Egypt, the March PMI reading is still below the neutral ceiling of 50, indicating a decline in the health of the sector.

Meanwhile, Egypt’s non-oil private sector continued to contract sharply in terms of activity and new orders in March, primarily due to the high inflation and supply disruptions that both led to a weakness of demand, according to the report.

The report also mentioned the impact of exchange rate volatility in the local market, which led to significant rises in costs and charges.

The Egyptian pound has been devaluated three times since March 2022, with a fourth devaluation expected soon following the two-percent (200 bps) hike of the key interest rates by the Central Bank of Egypt last Thursday.

“The Egypt PMI continued to signal multiple headwinds on the private sector economy in March, rounding off a bleak first quarter of 2023, as demand remained crippled by high inflation, a weakening currency and import controls. At 46.7, the headline PMI signalled a further solid deterioration in the performance of non-oil companies, driven by steep falls in activity and new business volumes,” said Senior Economist at S&P Global Market Intelligence David Owen.

“Inventories and employment levels also decreased, with purchasing once again impacted by customs restrictions,” he added.