Egypt's non-oil business sector activity stabilises in Jan: PMI report

Reuters , Monday 5 Feb 2018

Egypt's non-oil private sector business activity stabilised in January after a slump the previous month, with an overall positive outlook thanks to tough economic reforms, a survey showed.

The Emirates NBD Egypt Purchasing Managers' Index (PMI) for the non-oil private sector rose to 49.9 in January from 48.3 in December, remaining just below the 50 mark than separates growth from contraction.

"While Egypt's headline PMI reading remained just shy of the 50.0 neutral mark in January, the signs are encouraging as we begin 2018," Daniel Richards, MENA Economist at Emirates NBD, said.

"A pick-up in new export orders in particular stands as an indication that the difficult economic reforms enacted in late 2016 are starting to pay off," he said.

New export orders expanded in January thanks mainly to greater demand for Egyptian goods and services from international markets, the survey said.

Egyptian exports have gained new markets since the central bank liberalized the exchange rate in November 2016 as part of a $12 billion International Monetary Fund reform programme. The pound lost half its value after the float.

Non-oil business activity grew for the first time in 25 months in November, with a similar survey attributing the growth to the IMF-linked reforms.

The economy has been struggling to recover since a 2011 uprising scared tourists and investors away, two main sources of foreign currency.

The recent reforms have hit Egyptians hard, however, affecting purchasing power with a much weaker Egyptian pound.

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