The seasonally adjusted S&P Global Egypt Purchasing Managers' Index (PMI), an indicator of the operating conditions in the non-oil private sector, inched higher to 48.5 in December from 48.4 the prior month, signalling a modest deterioration in business conditions.
Still, the non-oil PMI was slightly better than its average over the past year of 47.9, according to S&P Global’s report.
"The Egypt non-oil economy rounded off the year with the fastest drop in sales for seven months over December, suggesting that the drag on demand conditions from inflation has not lost any power,” said senior economist at S&P Global Market Intelligence David Owen.

New orders declined at the sharpest monthly rate since May as firms faced rising costs from the devaluation of the Egyptian pound and the disruption in the supply chain, while wholesale and retail saw a particularly steep drop in demand, the report said.
As a result, companies reduced output for a third straight month, with the contraction quickening slightly. The S&P report highlighted that input costs rose sharply due to higher purchase prices, though the inflation rate eased, urging companies to limit selling price increases to preserve demand.
"The fact that firms were less keen to raise prices in December highlights how they still face a tricky balance between supporting demand or margins. Given the nature of the current inflation wave, relief on this conundrum is only likely to come from an easing of external political and financial headwinds,” Owen commented.
Some positives emerged. Future expectations improved from November's record low and payrolls rose for the first time in three months on efforts to boost capacity, the S&P report concluded.

On Wednesday, Prime Minister Mostafa Madbouly stated that the government is planning to reduce inflation to below 10 percent in 2025, expecting the economy to fully recover in that year.
The annual headline inflation rate declined to 36.4 percent in November 2023, according to the Central Agency for Public Mobilization and Statistics.
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