Egypt’s non-oil private-sector activity shrank in September to its lowest level in nine months, a survey showed on Wednesday. The Emirates NBD Egypt Purchasing Managers’ Index (PMI) for the non-oil private sector weakened to 48.7 in September from 50.5 in August, putting it below the 50 mark that separates growth from contraction. It was the first time the sector had contracted since June.
Daniel Richards, Mena economist at Emirates NBD, said that “despite the two months of consecutive 50-plus readings in July and August, there remains some weakness in the recovery”. He said September’s reading was higher than the average of 47.9 seen since an International Monetary Fund reform programme began in November 2016, however, and that the outlook remained positive. About 18% of surveyed companies saw a decline in output due to weak market demand and unfavourable market conditions.
New export orders also fell during September. Companies surveyed said the decline was caused by less demand from international markets for Egyptian goods and services. Egypt’s fiscal year runs from July to June. Egypt implemented a series of tough economic reforms as part of the three-year $12bn programme agreed with the IMF. The reforms involved new taxes, deep cuts to energy subsidies and a currency devaluation in an attempt to draw back investors who fled during the 2011 uprising.
Sources and photo-credits: Gulf Times, Reuters