Amid greater confidence, Egypt’s non-oil private sector is showing signs of recovery

(MENAFN) A recent survey in Egypt revealed encouraging developments pointing to a potential slowdown in the country’s non-oil private sector, signaling a return to confidence and stability. The positive trend is the result of improved price stability following the devaluation of the pound in March and the eight billion dollar loan agreement with the International Monetary Fund.

According to the study, Egypt’s Purchasing Managers’ Index (PMI) rose to its highest level in almost three years in May, indicating a marked improvement in sentiment and economic activity. The decline in inflation pressure observed since the beginning of 2024 has contributed to achieving an appearance of stability in demand rates, making entrepreneurs optimistic.

Standard & Poor’s Global Purchasing Managers’ Index in Egypt rose to 49.6 points in May from 47.4 in April, but remained below the key level of 50, which marks growth from decline for the forty-second consecutive month. Despite this, the data suggests that economic activity declined only moderately in May, with differences observed across sectors.

While manufacturing, wholesale and retail trade continued to decline, contrasting growth was recorded in the services and construction sectors. This mixed picture highlights the complex nature of Egypt’s economic recovery, with some sectors showing resilience while others face ongoing challenges.

Encouragingly, business sentiment improved for the second month in a row, with the future production expectations index rising to 55.9 in May from 55.3 in April. This increase in confidence reflects growing optimism among businesses about the economic outlook and the prospects for future growth and expansion.

Overall, the survey results point to a cautious but hopeful outlook for Egypt’s non-oil private sector, with businesses becoming increasingly optimistic about the prospects for economic improvement in the coming months. Continued efforts to maintain stability and implement structural reforms are likely to further strengthen confidence and support the sustainable growth of the Egyptian economy.

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