Egypt's non-oil private sector under pressure in March amid currency volatility: PMI

Updated 4/3/2024 8:29:00 AM
Egypt's non-oil private sector under pressure in March amid currency volatility: PMI

Arab Finance: Egypt’s non-oil private sector continued to face a downswing in operating conditions in March, with business activity and new order volumes falling at similar rates as those observed in February, according to the S&P Global Egypt Purchasing Managers’ Index™’s (PMI) survey posted on April 3rd.

The headline seasonally adjusted S&P Global Egypt PMI inched up to 47.6 in March from 47.1 in February, the data revealed.

“Businesses in Egypt's non-oil private sector continued to come under pressure from the country's recent currency crisis in March. The sharp fall in Suez Canal activity due to the Red Sea crisis led to a marked drop in US dollar inflows in February, causing exchange rates and inflation to spiral upwards,” Senior Economist at S&P Global Market Intelligence David Owen commented.

The decline in business activities was slightly milder than the recent low in February, and the second-strongest in 14 months.

“February's PMI results indicated a considerable downturn in business activity, and March was little different, except for a modest reduction in the rate of decline,” Owen added.

Although business activity and confidence remained low, the survey indicated that recent steps to fight Egypt’s currency crisis, including interest rates and floating the Egyptian pound, alleviated price pressures.

The report also showed that input purchases continued to slump rapidly in March, mostly due to lower new work inflows.

As for the sentiment towards future activity, non-oil businesses showed the lowest level of confidence in March.

However, they remained positive about the coming 12 months, with concerns that the current economic conditions would stay gloomy, resulting in a further downturn in sales.