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A slowdown in input cost inflation saw Egypt’s non-oil private sector growth creep closer to stablization in December, IHS Markit revealed.
The country’s Purchasing Managers’ Index ticked up to 49 in December, up from 48.7 in the previous month, showing that the private sector was moving closer to the 50-threshold which reflects neutrality.
The index was also moderately above the long-run series average of 48.2, the latest survey data showed.
Purchasing costs and wages went up slightly, in what was the largest monthly deceleration in inflation for over three years, the London-based firm said. Despite that, price pressures were still higher overall, prompting firms to raise their selling prices.
“The latest Egypt PMI gave increased confidence that inflationary pressures peaked earlier in the fourth quarter and are now beginning to soften. Input prices rose at the slowest rate since September, while the month-on-month drop in inflation was the quickest recorded for more than three years,” David Owen, economist at IHS Markit, said
Output and new orders still fell, yet it was the weakest drop in three months. Higher selling prices and lackluster demand were cited as reasons for the decline.
On a more positive note, a rebound in tourism supported new business, in addition to a considerable upswing in Egypt’s exports. The latter was the highest since February.
Business confidence was still weak in December as only 23 percent of firms had a favorable outlook, with worries about omicron and high prices mounting. Consequently, employment dropped further during the month. Companies attributed lower sales and a slight jump in backlogs to the hiring decline.