Cairo – Mubasher: Business conditions in the Egyptian non-oil private sector showed a softer deterioration in March, as inflation of production inputs mitigated, putting some hurdle on product prices.

Demand in the market fell as the devaluation of the pound and the “general price uncertainty” hurt spending, according to a report by S&P Global.

The headline seasonally adjusted S&P Global Egypt Purchasing Managers’ Index (PMI), a measurement of the operating conditions in the non-oil private sector edged higher to 47.60 in March from 47.10 in February.

However, foreign demand improved and export orders rose for the first time since December 2022.

Sentiment regarding the market outlook was at one of its weakest levels in March, as companies held concerns that the economic conditions would remain challenging which could take its toll on sales event further.

On the positive side, S&P Global’s data showed that Egypt’s recent measures to combat inflation, including free-floating the pound and raising interest rates by 6% eased price increases, bringing the input price inflation rate to a three-month low.

David Owen, Senior Economist at S&P Global Market Intelligence, said: "Businesses in Egypt's non-oil private sector continued to come under pressure from the country's recent currency crisis in March. The sharp fall in Suez Canal activity due to the Red Sea crisis led to a marked drop in US dollar inflows in February, causing exchange rates and inflation to spiral upwards.

"February's PMI results indicated a considerable downturn in business activity, and March was little different, except for a modest reduction in the rate of decline,” Owen elaborated.

“On the other hand, firms are still lacking confidence that activity will grow over the year ahead, suggesting that economic risks may take more time to disappear,” the economist warned.