Egypt's non-oil private sector stable in August

According to the S&P Global Egypt Purchasing Managers’ Index (PMI), the non-oil private sector remained at 49.2 points in August. A PMI reading above 50 percent indicates that the sector is generally expanding; below 50 percent indicates that it is generally declining.

Private sector productivity in Egypt was worse in August compared to the month before due to higher inflation in input costs, S&P said in a report.

"The [Egyptian non-oil] sector has somewhat stabilized in recent months after a prolonged period of contraction, said David Owen, senior economist at S&P Global Market Intelligence.

"However, a pick-up in inflationary pressures was also indicated by the August survey findings, with some firms noting that a faster increase in input costs had reduced overall activity. Comments from surveyed companies suggest that exchange rate problems and cost of living pressures will need to be fully addressed before the country can escape the detrimental effects of inflation which currently runs at a record high," Owen noted.

To tackle the surge in inflation since Russia's invasion of Ukraine, the Egyptian government raised the minimum wage for state and private-sector employees in March and June. The increase in state employee salaries and pensions added an additional burden of EGP 150 billion to the state treasury.

Egypt’s headline annual inflation rate kept its upturn in July 2023 to hit a new record level, jumping to 38.2 percent, up from 14.6 percent recorded in the same month of 2022.