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Egypt Purchasing Managers’ Index (PMI) registered 45.2 in June, down from 47 in May, marking its weakest performance in two years. The data of the index revealed that the reading was the lowest recorded since June 2020 during the first wave of the COVID-19 pandemic and much below the series average of 48.2.
As a result, businesses saw demand slump in the face of sharply rising prices, coupled with a devalued pound and material shortfalls. The PMI data also signaled the quickest rise in input costs for almost four years. This led to a marked acceleration in the rate of selling charge inflation. Two of the largest components of the PMI, the Output and New Orders Indices, both declined to their lowest levels since the second quarter of 2020 in June.
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Egyptian companies suffered from a sharp downturn in new business in June, leading to the strongest deterioration in economic conditions since COVID-19 measures were introduced in the second quarter of 2020. The sharp drop-off in demand came from rising inflation and tightening monetary policy, as the Central Bank’s decision in May to devalue the pound against the US dollar, in response to interest rate rises by the Federal Reserve, added to the cost of importing goods.
