{"id":614649,"date":"2024-02-05T00:00:00","date_gmt":"2024-02-05T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2024\/02\/05\/this-evening-weighed-down-by-inflation-pmi-contracts-for-the-38th-month-in-a-row\/"},"modified":"2024-02-05T00:00:00","modified_gmt":"2024-02-05T00:00:00","slug":"this-evening-weighed-down-by-inflation-pmi-contracts-for-the-38th-month-in-a-row","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2024\/02\/05\/this-evening-weighed-down-by-inflation-pmi-contracts-for-the-38th-month-in-a-row\/","title":{"rendered":"THIS EVENING: Weighed down by inflation, PMI contracts for the 38th month in a row"},"content":{"rendered":"

Good afternoon, folks, and happy Monday. <\/strong>The news cycle at home and abroad continues to be primarily led by macroeconomics and monetary policy, while everyone here in Om El Donia is keeping their eyes peeled for signs that our IMF agreement is signed, sealed, and delivered.<\/p>\n

THE BIG STORY TODAY<\/strong><\/p>\n

Egypt\u2019s non-oil private sector contracted in January for the 38th consecutive month <\/strong>as inflationary pressures continued to weigh down the headline figure, according to S&P Global\u2019s PMI report (pdf)<\/a>. Egypt\u2019s index dropped slightly to 48.1 last month from 48.5 in December. Firms\u2019 output and new orders fell due to increased prices dampening client demand, with price pressures and geopolitical conflict also weighing down growth. While firms\u2019 purchasing activity decreased, its trend moved closer to stabilization, as firms indicated stock levels were kept stable, and lead times only increased slightly.<\/p>\n

Inflation continues to be a thorn in Egypt\u2019s side:<\/strong> Inflationary pressures picked up in January, respondents noted, with input and output costs increasing to their highest levels in 12 months, on the back of increased purchasing costs. Prices of wood, iron, and fuel surged due to currency weakness and ongoing import problems leading firms to shift the greater share of their costs onto customers resulting in a sharp price increase.<\/p>\n

THE BIG STORY ABROAD<\/strong><\/p>\n

The international business press is focused on monetary policy this afternoon:<\/strong> The US Federal Reserve could have room to cut interest rates within the next few months, the Financial Times<\/a> says, as inflation is expected to cool to 2.2% this year and decelerate further to 2% in 2025, according to OECD projections<\/a>. Meanwhile, although the UK is expected to have the highest inflation rate in the G7 (2.8% in 2024), the Bank of England could move ahead with monetary loosening in 3Q 2024, the OECD said. <\/p>\n

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