Non-oil private sector activity in Egypt declined last July, but at a slower pace than its lowest level in two years in June, with demand continuing to be affected by high inflation, and the pressure of supply shortages on supplies.
The Standard & Poor's Global Purchasing Managers' Index in Egypt rose slightly to 46.4 from 45.2 in June, to remain below the 50-point level separating growth from contraction. And July is the twentieth consecutive month in which the index recorded a decline.
According to Standard & Poor's Global, the rate of deflation has eased since June, but is still sharp, as many members of the committee found that higher prices led to a decrease in customer spending. It indicated that in addition to weak demand, the shortage of raw materials was also a reason for this decline, linking this shortage and rising costs to the “Corona” pandemic, the Russian war in Ukraine and the strength of the dollar.
According to Standard & Poor's, the manufacturing, construction, wholesale and retail sectors all contracted. Core inflation fell to 13.2 percent in June from 13.5 percent in May. The sub-index for production prices fell to 64.1 from 72.0 in June, while the purchasing cost index fell to 64.2 from 70.9.
The July production and new orders index continued the contraction that has been going on for nearly a year, but the production index improved to 43.6 from 41.3 in June, and the new orders index rose to 43.1 from 41.9.
The sub-index for future production expectations fell to 56.1 from June 63.7, approaching its lowest reading since this category was included in the survey 10 years ago.
The Egyptian government is seeking to exit some sectors and leave them to the private sector, to increase its contribution to the overall economy to 65 percent from about 30 percent currently.
Source (Al-Sharq Al-Awsat Newspaper, Edited)
