Egypt's Purchasing Managers' Index (PMI) for the non-oil private sector posted 46.9 in February, up from 45.5 in January to signal a softer downturn in inflationary pressures. According to S&P Global's PMITM survey data released on Sunday, Egypt's non-oil economy remained in a steep downturn in February as demand continued to hit by high inflation and supply chain pressures. As a result, job numbers dropped at the fastest rate in nine months and business confidence was at a near-record low. On the plus side, the country's inflationary pressures softened from January's recent highs. "The latest PMI data for Egypt continued to signal a troubled market in February, but with some relief after a rocky start to the year." David Owen, Senior Economist at S&P Global Market Intelligence, said. "After hitting a four-and-a-half-year high in January, the rate of purchase price inflation softened to the lowest since October, as firms suffered to a lesser extent from weaker exchange rates and rising import costs. Similarly, output charge inflation was the softest for four months, after posting a near six-year high in the previous month. The findings provide some hope that inflation may start to soften after reaching 25.8% in January." Owen added. The S&P Global survey showed: "Output levels continued to contract at a sharp pace midway through the first quarter of the year, as firms once again reported weakening demand conditions amid surging prices. The rate of decline eased from the previous month but remained sharp." "Similarly, new business intakes fell at a slower, but still marked pace in February, with the downturn often reflecting a reduction in client demand due to high inflation. Export sales also disappointed, falling for the second consecutive month and to a sharp degree, as firms signalled that a weak foreign economic climate had suppressed sales." Subsequently, the survey said businesses were even more subdued in their assessment of the coming 12 months, as overall expectations dropped since the start of the year and were just above the record low seen in October last year. Notably, just 5 percent of survey respondents forecasted an increase in output, amid suggestions that current headwinds, including weak demand, severe inflation, import controls and foreign currency shortfalls, are likely to continue throughout 2023.
