The activity of the private sector in Egypt continues to contract due to the Ukrainian crisis

A poll today showed Sunday non-oil private sector activity in Egypt shrank in April, continuing to deteriorate in has been going on for 17 months, as the Ukrainian crisis exacerbated price increases.

The index of purchasing managers in Egypt, issued by Standard & Poor’s Global, rose to 46.9 from 46.5 in March, but is still below the 50.0 separating growth from contraction.

“Although the decline has been small since March, it is still the second fastest decline in just under two years, with companies often reporting cuts due to higher input costs, ”said S&P Global.

The rise in global prices of food and raw materials prime continued to cause a sharp decline in production and new orders, but at a slightly slower pace, with the input price sub-index in increase to 58.3 from 58.6 in March and the purchase cost sub-index in increase to 58.8 from 59.1.

“The cost pressures are in largely due to the increase in energy and material prices prime due to war in Ukraine, “Standard & Poor’s Global said.

“Many participants also commented on the recent devaluation of the Egyptian pound. Despite the marginal decline, the overall inflation rate of input prices was strong and remained above the media recorded in 2021, “he added.

The central bank allowed the pound to drop 14% against the dollar on March 21 after holding the currency virtually constant for the previous 18 months.

Production and new orders continued the contraction of the months in April, although the production index, which reached 45.3, was slightly better than the 44.6 in March. The new orders index improved to 45.3 from 45.1.

The sub-index for future production expectations also improved to 57.7 from 52.5 in March, when it was at its lowest level since it was first included in the survey a decade ago. The April number was still the third lowest in a decade.

“The continuation of the war in Ukraine means that companies are anticipating greater challenges in pricing and supply terms, leading to other relatively pessimistic outlook for business, ”said David Owen, economist at Standard & Poor’s Global.

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