Egypt's non-oil business activity slows in May, PMI shows

Reuters , Tuesday 5 Jun 2018

BP's offshore oil platform seen off the coast of Egypt (File Photo: Courtesy of BP)

Egypt's non-oil private-sector business activity shrank in May amid contractions in new orders and outputs, a survey showed on Tuesday.

The Emirates NBD Egypt Purchasing Manager's Index (PMI) for the private sector excluding the oil industry fell to 49.2 in May from 50.1 in April.

A reading below 50 indicates a contraction; above, an expansion.

A decline in new orders led to the shrinking of the business activity in May, the survey said.

Output slightly declined to 49.3 in May from 50 in April, the survey showed, citing weaker demand.

Egypt's economy has been struggling to recover since a 2011 uprising scared away tourists and investors, two big sources of foreign currency.

Tough economic reforms tied to a three-year, $12 billion programme agreed with the International Monetary Fund in late 2016 have hit Egyptians hard.

A much weaker Egyptian pound has cut purchasing power and contributed to soaring inflation in the import-dependant country.

The PMI "slipped back below the neutral 50.0 mark in May, after moving to expansion territory in April. Nevertheless, the index continues to hover around the 50.0 mark, a vast improvement on the trends observed prior to the November 2016 reforms," said Daniel Richards, MENA economist at Emirates NBD.

"And while the forward-looking data is not quite as positive as it has been in recent months, it continues to point towards an ongoing improvement in the Egyptian economy."

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