CAIRO, Egypt — Egypt’s non-oil private sector took a severe hit in November due to high inflationary pressures compounded by a recent depreciation of the currency, suffering its sharpest contraction in two and a half years, according to the latest Purchasing Managers Index (PMI).

The survey, compiled by S&P Global, is designed to give a snapshot of operating conditions in the non-oil private sector economy. With the contraction recorded in November, Egypt’s non-oil private sector has now been in the red for two consecutive years. It crossed the line with the worst reading since June 2020 and the quickest fall in activity documented since the beginning of 2017 if the initial phase of the COVID-19 pandemic, marked by the lockdown, is set aside.

The contraction captured by the PMI comes in spite of Egypt’s Ministry of Planning and Economic Development’s Nov. 28 announcement of a 4.4%  economic growth in the first quarter of the current fiscal year, which began in July. And despite the private sector stalling in the contractionary territory since Nov. 2020, the government still sticks to a 5% growth projection for this fiscal course, revealing a broad discrepancy.

“All economies go through stages, and in the case of Egypt it has gone through the most significant changes and stresses for over a decade." Angus Blair, CEO of the Signet Institute, told Al-Monitor.