Egypt’s non-oil private sector activity contracted again in March although businesses registered improved export orders for the third consecutive month, a survey showed on Tuesday.
The Emirates NBD Egypt Purchasing Manager’s Index (PMI) for the non-oil private sector fell to 49.2 from February’s reading of 49.7, shying further away from the 50 mark that separates growth from contraction.
Output, which stood at 49.3, registered a second deterioration in March although the contraction rate had improved from the previous month, the survey showed.
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, but has not done so since.
The economy has been struggling to recover since a 2011 uprising scared tourists and investors away, two main sources of foreign currency.
A series of tough economic reforms implemented in recent years have hit Egyptians hard, affecting purchasing power with a much weaker Egyptian pound.
“While we still anticipate an improvement in the Egyptian economy this year as the negative effects of its IMF-sponsored reforms pass through, the latest PMI data implies that this is taking longer than the authorities might have hoped,” Daniel Richards, MENA Economist at Emirates NBD said.
“Nevertheless, the index has consistently threatened to turn expansionary over recent readings, which is a vast improvement on the months just prior to the economic reforms.”