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Egypt’s Non-Oil Private Sector Reaches Highest Level Since 2021

June 4, 2024
Image Credit: Your Egypt Tours

Egypt’s Purchasing Managers’ Index – a monthly economic survey that monitors the growth or decline of non-oil business activities – recorded a 33-month high during May on the back of improving demands and easing inflation rates.

The report, published by Standard & Poor’s (S&P) on 4 June, shows Egypt jumping to 49.6 in May from 47.4 in April. Although the country remains below the 50 mark, indicating contraction in the private sector, it is now near growth territory.

Signs of recovery emerged thanks to improved price stability following the devaluation of the currency in March and a USD 8 billion (EGP 377 billion) expanded loan agreement with the International Monetary Fund, the report explains.

Despite the significant improvement, certain business activities saw a decline, albeit moderate. While manufacturing and wholesale & retail sectors experienced further declines, the services and construction sectors showed growth.

“That said, ongoing downturns in industries such as manufacturing and wholesale & retail show that the recovery is still lopsided and may take more time to spread across the rest of the economy,” David Owens, an economist at S&P, told Reuters.

Growing confidence by businesses also led to a rise in staff recruitment in May – the second increase in the past three months.

Egypt’s recent recovery comes after combatting a foreign currency crisis during the past two years, prompting a sharp economic decline.

The country has since amassed billions of dollars back into its foreign reserves, primarily through privatizing stakes in state assets and receiving loans from multilateral lenders.

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