The Standard & Poor’s Global Purchasing Managers’ Index showed that non-oil private sector activity in Egypt continued to decline in May 2022 for the eighth month in a row.
The fund said in a report that the fallout from the Ukrainian crisis, price spikes and fluctuations in supply chains, have led to more hardship for the Egyptian economy.
Egypt’s Standard & Poor’s Global Purchasing Managers Index scored 47 in May, up from 46.9 in April last year.
A drop in the index below the 50-point level means that there is contraction in activity, and a higher rise means that there is expansion.
The institution said the rise in prices continues to affect the movement of the non-oil private sector in Egypt, adding: “Prices for inputs rose to a 6-month peak due to the rise in the value of the dollar.”
The central bank lowered the exchange rate of the Egyptian pound to 18.3 per dollar from 15.6 earlier, as one of the tools to fight inflation, in addition to raising interest rates.
The report states: “As a result of rising input prices, companies in Egypt have reduced their purchases of raw materials, and thus the level of production and employment has declined.” He continued: “Trade protectionism, introduced by some countries by banning the export of certain goods, has affected the shortage of their supply around the world.”
PMI is based on five core principles: new orders, stock levels, production, supplier shipments, and employment and work environment.
Source: El Iktisad
