Egypt’s non-oil business shrinks for 41st straight month, PMI shows By Reuters

Egypt’s non-oil business shrinks for 41st straight month, PMI shows By Reuters

CAIRO (Reuters) – Egypt’s non-oil private sector continued to shrink in April despite a $35 billion investment deal signed with the United Arab Emirates in February and an $8 billion IMF agreement in March, a survey showed on Wednesday.

The S&P Global Purchasing Managers’ Index (PMI) for Egypt edged down to 47.4 in April from 47.6 in March, remaining below the 50.0 threshold that separates growth from contraction for a 41st consecutive month.

“Business activity once again fell markedly as firms commented on difficult market conditions, with the decline leading to a renewed drop in employment,” S&P Global said.

The employment sub-index slipped to 49.7 in April from 50.8 in March.

Egypt signed an agreement with the International Monetary Fund on March 6, with an initial $820 million payout received in April and a second, $820 million payout expected after an IMF review in June.

In granting the financial support, the IMF cited shocks to the Egyptian economy from the crisis in neighbouring Gaza. Egypt devalued its currency on March 6 and hiked interest rates by 600 basis points as part of the deal.

The output sub-index climbed to 44.8 in April from 44.5 in March and the new orders index improved to 45.5 from 45.0. Business sentiment also improved, with the future output expectations index climbing to 55.3 in April from 52.2 in March.

“Sentiment was at a six-month high, reflecting hopes of exchange rate stability, lower prices and better material availability,” S&P Global said.

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