Cairo – Mubasher: Egypt’s non-oil private sector extended its downtrend for the seventh straight month according to a survey by Emirates NBD.
Egypt Purchasing Manager (PMI) registered 46.9 points in April in which a sub-50.0 reading has been recorded, compared to 44.5 points last Month.
Both the production rate and new work sharply fell in April due to “subdued client demand” and the devaluation of Egyptian pound, in particular.
The devaluation of Egyptian pound mainly led to a rise in input and output charges and played a central role in inflationary pressures as “purchase prices were driven higher which led many companies to raise their tariffs”.
On the other hand, clients were affected by uncertainty over exchange rates and security instability in Egypt, thus weighing down total new business and activities.
“Egypt’s private sector continues to struggle amidst the FX shortage. Although further EGP weakness will eventually help lay the foundations for an economic recovery, in the short term uncertainty over the exchange rate could see additional declines in output, and a further rise in inflationary pressures.”, said Jean-Paul Pigat, Senior Economist at Emirates NBD.
