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Egypt’s PMI highlights slower pace of decline in April

Egypt’s PMI highlights slower pace of decline in April
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Cairo – Mubasher: The headline seasonally adjusted Purchasing Managers’ Index (PMI) of Egypt rose to 47.3 in April 2023 from 46.7 last March.

The PMI increased to its highest since October 2022, indicating that business conditions retreated to a lesser extent, according to the latest S&P Global PMI data.

The reading highlighted that the pace of decline softened to the weakest for six months, driven by a slower fall in demand levels and easing inflationary pressures. Nonetheless, the overall import controls and high prices continued to weigh on inventories.

Meanwhile, the sustained economic weakness led to the most downbeat outlook in the survey's history.

Although manufacturing, wholesale and retail, in addition to services witnessed declines in output and new work, the construction industry recorded growth for the first time in ten months.

As per the latest survey data, the inflationary pressures were calming from the multi-year highs seen towards the end of 2022.

In spite of some positivity from a softer rate of cost inflation, firms' output predictions for the year ahead dropped to their weakest on record in April.

Businesses underlined that weak demand, locally and globally, as well as high price levels showed that the path for future activity was still highly uncertain.

However, the findings predict that headline inflation in Egypt will begin to soften over the next months after hitting a near six-year high of 32.7% in March, which will contribute to easing the cost-of-living crisis.

David Owen, Economist at S&P Global Market Intelligence, stated: "The latest PMI figures for Egypt provided some promising hints for the direction of the non-oil economy, particularly on inflation.”

“Relative calmness in currency markets led to reduced pressure on import prices, culminating in the softest rise in purchase costs for a year and one that was weaker than the trend rate,” Owen added.

He also elaborated that “the slowdown encouraged firms to raise their own charges to a lesser extent, which helped to partly alleviate the downturn in sales.”