Cairo – Mubasher: Egypt’s non-oil private sector witnessed a steep decline in business conditions in March as the repercussions of the novel coronavirus (COVI-19) weighed on tourism activity and consumer spending.

The seasonally adjusted IHS Markit Egypt Purchasing Managers’ Index dropped to 44.2 in March, the lowest level since January 2017, compared to 47.1 in February, according to a report on Sunday. A reading above 50 indicates expansion, while a reading below that signals contraction.

“The global economy is notably reeling from the effect of the COVID-19 pandemic, and March survey data showed that the Egyptian non-oil private sector was no exception,” David Owen, economist at IHS Markit, said.

The coronavirus outbreak weighed on output and new orders at Egyptian companies with input purchases decreasing at the fastest pace in three years and export volumes falling at the quickest pace in more than seven years.   

The cost inflationary pressures increased in March on the back of an appreciation of the US dollar against the Egyptian pound, but it remained soft due to reductions in other prices, particularly oil.

“With the Covid-19 outbreak ongoing, firms were often more downbeat about future output prospects in March. This brought confidence levels down to the lowest in the series history, with many fearing a lasting impact on the domestic and world economy.”