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  • 06-06-23

    Egypt's Non-Oil Private Sector Witnesses Softest Downturn in 15 Months

    (MENAFN) Efforts to stabilize the demand environment in Egypt have started to bear fruit as the country's non-oil private sector growth outlook experienced its softest downturn in 15 months. Although still below the 50 mark that indicates expansion, the Purchasing Managers' Index (PMI) for Egypt increased for the second consecutive month, rising from 47.3 in April to 47.8 in May, according to a report by S&P Global.

    While challenges persisted, companies reported that inflationary pressures were gradually easing, providing some relief despite the adverse effects of higher prices on sales, output, and purchasing. The report highlighted that the country's non-oil private sector was making progress in stabilizing the demand environment.

    However, despite the modest improvements, Egypt still faced a significant contraction in activity levels. Non-oil companies continued to grapple with difficulties, leading to a gloomy outlook for business activity and further reductions in employment. These challenges emphasized the ongoing hurdles faced by the country's non-oil private sector.

    David Owen, Senior Economist at S&P Global Market Intelligence, noted that although the Egypt PMI remained in negative territory in May, there were promising signs that the current economic headwinds were beginning to dissipate. The headline index showed a steady increase for the second consecutive month, reaching 47.8. Additionally, the sub-indices for output and new orders both reached their highest levels in 17 and seven months, respectively, indicating positive momentum in these areas.

    While the PMI results indicate some improvements and signs of recovery, Egypt's non-oil private sector still faces significant challenges. The report suggests that the overall economic environment is gradually stabilizing, but further efforts are needed to fully revive business activity and employment levels. By addressing the remaining obstacles and implementing appropriate strategies, Egypt can work towards restoring growth and resilience in its non-oil private sector.

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