Egypt Non-Oil Private Sector Downturn Worsens In October

(RTTNews) - Egypt's non-oil private sector activity worsened markedly in October amid sharp inflation, survey figures from Emirates NBD and IHS Markit showed Thursday.

The seasonally adjusted Emirates NBD Egypt Purchasing Managers' Index, or PMI, dropped to a 39-month low of 42.0 in October from 46.3 in September.

Any reading below 50 indicates contraction in the sector.

The weakness of the Egyptian pound, particularly against the US dollar, was a key factor behind the overall downturn in October. This resulted higher costs and material shortages during the month.

Input prices grew at the greatest extent since data collection started in April 2011. Consequently, firms also raised their charges at a survey-record pace.

Steep inflation had an impact on both output and new orders in October.

"It is difficult to see the situation improving before an IMF agreement is signed, as the ongoing FX shortage and EGP weakness on the parallel market are the main factors undermining economic output at the moment," Jean-Paul Pigat, Senior Economist at Emirates NBD, said.