Bloomberg has said that Egyptian companies are reducing production and staff numbers due to the devaluation of the local currency, which the government was forced to do to conclude a deal with the International Monetary Fund.
S&P Global economist David Owen has said production and new business in the country fell at a sharp but subdued rate, with companies mainly linking the decline to inflationary pressures. Owen has added that while companies passed a more significant proportion of their expenses on to clients, concerns about costs led them to cut staff numbers. Under the pressure of inflation, the weakness of the local currency, and the continued restrictions on imports, the activity of the non-oil private sector in Egypt continued to contract, recording 47.2 points last December, to remain below the 50-point level separating growth from deflation.
The Purchasing Managers’ Index (PMI) has shown a strong deterioration in the performance of the Egyptian non-oil sector, as rapid inflation continued to hamper the economy at the end of 2022. PMI also indicated a rapid increase in the costs of production inputs. According to Standard & Poor’s Global, the country’s production in December was also limited due to a sharp drop in purchasing and weak financial liquidity and supply shortages due to import controls. Egypt is waiting for billions of dollars in investments from Gulf countries.