Another bleak PMI report: Business conditions worsened in Egypt’s non-oil sectors for the ninth straight month, according the Emirates NBD PMI compiled by Markit. The PMI recorded a reading of 47.5 in June, slightly worse than May’s reading of 47.6. Input costs have reportedly increased at a survey-record pace, while output, new orders, and employment have all fallen. The downturn was exacerbated by a severe drop in tourism, while currency weakness anecdotally drove costs up. Employment also fell for the thirteenth straight month. Jean-Paul Pigat, senior economist at Emirates NBD, believes “hopes for a stronger recovery will depend in large part on whether a solution to the ongoing FX liquidity crunch can be found in the near term.” The faintest of silver linings: The average PMI reading in 2Q2016 of 47.3 was marginally better than the 46.9 in 1Q2016 and 46.9 in 4Q2015.

Core inflation at seven-year high: The reports of cost increases are in line with inflation reports as headline inflation jumped to 14% in June from 12.3% in May, Reuters reported. This is in step with the annual spike of inflation during Ramadan on the back of rising food prices. The core inflation rate also went up in June, registering 12.37% up from May’s reading of 12.23%. That’s a seven-year high, Bloomberg points out. Al Shorouk notes that the price increases were driven by the 18.4% food price inflation last month as vegetable prices rose 38.3% y-o-y as well as a 33.2% jump in healthcare and pharmaceutical prices; we expect the latter comes largely as a result of the Health Ministry’s move in June to allow drugmakers to raise prices.