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

Egypt’s Purchasing Managers’ Index – a monthly economic survey that monitors the growth or decline of non-oil business activity – recorded a 33-month high in May as demand improved and inflation rates eased.

A report published on June 4 by Standard & Poor’s (S&P) shows that Egypt’s reading in May increased from 47.4 in April to 49.6. Although the country remains below the 50 level, indicating a shrinking private sector, it is currently near the growth area.

As the report explains, signs of recovery have emerged thanks to improved price stability following the March currency devaluation and the extension of a $8 billion (EGP 377 billion) loan agreement with the International Monetary Fund.

Despite significant improvement, there has been a decline in some areas of economic activity, albeit a moderate one. While the manufacturing and wholesale and retail sectors saw further declines, the services and construction sectors showed growth.

“That said, the ongoing downturn in industries such as manufacturing and wholesale and retail trade shows that the recovery is still uneven and may take longer to spread to the rest of the economy,” David Owens, an economist at S&P, told Reuters.

The growing confidence of entrepreneurs also translated into an increase in employee recruitment in May – it was the second increase in the last three months.

Egypt’s recent recovery comes after struggling to cope with a currency crisis over the past two years that caused a sharp economic decline.

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

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