Egypt PMI June 2022

The S&P Global Purchasing Managers’ Index, which measures business activity in the non-oil private sector, stood at 45.2 in June, compared to 47.0 in May. The June result was the weakest since June 2020. As the index fell below the no-change threshold of 50.0 where it has stalled for the past 19 months, it signals a sharper deterioration in business conditions from the previous month. The decline occurred against the backdrop of lower demand, inflationary pressures and a lack of supply. Production and new orders continued to decline in June and fell to their lowest levels since the second quarter of 2020 as growing inflationary pressures continued to dominate demand. At the same time, shortages of raw materials contributed to a significant increase in delivery times, with work in progress rising for the first time in six months, and product prices rising. In terms of firms’ future expectations, sentiment rose to a five-month high. However, the sharp rise in production costs and geopolitical uncertainty are likely to continue to seriously slow down business activity in the near term.

David Owen, economist at S&P Global Market Intelligence, explained:

“Egyptian companies were hit by a sharp downturn in new business in June, leading to the worst deterioration in economic conditions since Covid-19 measures were introduced in the second quarter of 2020. The sharp drop in demand was caused by rising inflation and tightening of monetary policy. policy, as the Central Bank’s decision in May to devalue the pound sterling against the US dollar in response to an interest rate hike by the Federal Reserve increased the cost of importing goods.”

FocusEconomics forecasts that total investment will grow by 8.0% in fiscal 2023, unchanged from last month’s forecast, and by 7.3% in fiscal 2024.