Cairo – Mubasher: Egypt’s non-oil private sector firms kept facing ongoing difficulties in September as business conditions worsened for the twelfth month in a row, according to a survey sponsored by Emirates NBD.
Emirates NBD Egypt Purchasing Managers’ Index (PMI) dropped to 46.3 in September, compared with 47.0 in August, the survey indicated.
The survey attributed this continuing drop to a number of issues, including accelerated decline in the output as well as client demand fall at home and abroad due to the general economic slowdown and spiking inflation.
Moreover, high prices also hampered the sector’s performance amid currency weakness and the newly adopted VAT, which led to faster rise in prices.
Undoubtedly, this by turns led to a drop in job creation, in addition to motivating a number of companies to cut back on staff.
“The introduction of a Value Added Tax (VAT) appears to have played a role in curbing output and pushing inflation higher in September. While many of the economic reforms expected in Q4 will ultimately prove beneficial for long-term stability, in the near term they could result in a further deterioration in business conditions for the private sector”, said Jean-Paul Pigat, Senior Economist at Emirates NBD
