Egypt’s PMI lessens to 46 in January

CAIRO - 5 February 2020: "Egypt’s Emirates NBD Purchasing Managers’ Index (PMI) fell to 46 in January, the lowest level since early 2017, shortly after the country began its IMF reform programme," Head of MENA Research at Emirates NBD Khatija Haque stated.

Haque added that this decline matches dips witnessed in Saudi Arabia and the UAE, likely affected by the uncertainty seen throughout the month which will weigh on Egypt’s key tourism,

The Saudi PMI declined to 54.9 in January from 56.9 in December, and the Emirati PMI dropped to 49.3 as new orders and employment declined on average compared to December.

“Output was particularly weak, with nearly a quarter of respondents reporting weaker activity compared with December, but the outlook for the coming months is no more positive, given the slowdown we saw in new orders,” he said.

New export orders declined at the fastest pace since October 2016, just prior to the start of the IMF programme, when a weaker EGP was widely expected, which supported the bank’s view that the external developments were partly to blame for the decline in the PMI, according to Haque.“This slowdown will be a challenge for Egypt’s economy in 2020,” he stated.

Haque noted that the non-oil private sector has lagged in terms of its growth recovery, but recent communiqués from the Central Bank of Egypt’s monetary policy committee have indicated that the private sector is seeing some green shoots of recovery. “Should this be materially derailed then Egypt’s growth may undershoot our expectations,” he noted.