The S&P Global Purchasing Managers’ Index for Egypt fell to 45.4 in November from 47.7 in October, well below the 50.0 threshold between growth and contraction.
This is the second lowest reading since the pandemic caused the index to fall in June 2020, the 24th consecutive month of contraction.
“The rapid decline in business activity was the main factor in the recession, as survey respondents reported that rapidly rising costs and falling new orders forced them to cut production,” S&P Global said.
The Egyptian economy suffers from a shortage of foreign currency despite the devaluation of the currency by 14.5 percent on October 27, and the announcement of a $3 billion support package with the International Monetary Fund. A dollar shortage restricted imports for factory inputs and retail trade.
“The pound’s decline against the US dollar has led to a marked increase in the prices paid for raw materials, which have already been exacerbated by import restrictions since early 2022,” said David Owen, economist at Standard & Poor’s Global.
The PMI sub-indices for both aggregate input prices and purchase prices fell to 72.4, the highest level since July 2018, from 63.5 in October.
The sub-index of future production expectations improved to 55.7 after falling to a record low of 52.2 in October.
“Concerns about rising inflation, rising interest rates, a weak currency and a slowing global economy remained dampening,” Standard & Poor’s said.
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