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Egypt’s non-oil sector contracts for 30 straight months— Survey

Published

1 year ago

June 5, 2023

A recent survey by market insight firm, S&P Global has revealed that non-oil private sector activity in Egypt contracted for the 30th straight month in May.

The survey shows that the country’s Purchasing Managers’ Index (PMI) strengthened to 47.8 in May from 47.3 in April but remained well below the 50.0 threshold which marks growth in activity.

Egypt’s economy has been on a downward slide in recent years. The country is currently ranked 11th out of 14 countries in the Middle East/North Africa region, and its overall score is below the regional and world averages.

“Business activity levels continued to fall in the latest survey period, reflecting sustained efforts by companies to reduce output in line with weaker sales volumes,” S&P Global said.

“However, whilst solid overall, the rate of decline was the softest registered in almost a year-and-a-half, helped by near stabilisations in the manufacturing and services sectors,” it added.

“The toll of rising input prices and weak demand meant that purchasing activity at non-oil businesses continued to decline, leading to a further contraction in firms’ input inventories.

“The pace at which input purchases decreased was the slowest seen since last October, however. Ongoing import restrictions meant that lead times on inputs lengthened, albeit only mildly.

“While firms continued to report subdued demand that was largely attributed to inflation, some respondents began to see a recovery in client orders. Notably, new business intakes in the services economy grew for the second time in three months,” S&P Global said.

Core inflation on a year-on-year for the Egyptian economy is 38.575% while inflation on regulated items is 1.529% on a monthly basis and 12.505% on a yearly basis.

Related Topics:Egypt Egypt's non-oil Featured

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IMF mission concludes 4th loan program assessment in Egypt

Published

4 hours ago

November 22, 2024

Ifeoluwa Dada

Following the completion of a recent visit to Egypt, the International Monetary Fund (IMF) has announced that its mission had achieved significant strides in policy talks aimed at concluding the fourth review of the IMF loan program.

The review is the fourth in Egypt’s most recent 46-month IMF loan program, which was authorised in 2022 and increased to $8 billion this year following an economic crisis characterised by high inflation and chronic foreign exchange shortages. It may unleash more than $1.2 billion in financing.

Along with reaffirming its commitment to maintain a flexible exchange rate system, the IMF stated that Egypt “has implemented key reforms to preserve macroeconomic stability,” including the unification of the currency rate that facilitated imports.

Earlier on Wednesday, Egypt’s Prime Minister Mostafa Madbouly said Cairo has asked the IMF to modify the targets for the programme not only for this year, but for its full duration, he added without giving more details.

“Discussions will continue over the coming days to finalize agreement on the remaining policies and reforms that could support the completion of the fourth review,” the IMF added in its statement.

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Kenya seeks $750m from World Bank, obtains $200m from AfDB— Official

Published

2 days ago

November 20, 2024

Ifeoluwa Dada

The head of debt management for the finance ministry told Reuters that Kenya had obtained a $200 million loan from the African Development Bank (AfDB) and was negotiating a fresh $750 million loan with the World Bank.

After being forced to abandon proposed tax rises costing more than 346 billion shillings ($2.68 billion) in June due to fatal demonstrations, the East African nation’s administration, which has been grappling with significant debt, has been frantically seeking fresh funding.

The Finance Ministry’s public debt management office director general, Raphael Owino, told Reuters that the IMF’s October clearance of the seventh and eighth reviews, which opened the door for a $606 million loan tranche, had aided the ministry’s talks for more loans.

“The World Bank is coming on board, riding on the back of IMF receipts,” Owino said. “The AfDB is already on board.”

The discussions for more assistance, which came under the World Bank’s “Development Policy Operations” (DPO) with the government, were confirmed by a representative at the organization’s Kenya office.

“The amount of the current (loan) is yet to be determined. The amount will also depend on the implementation of the policy reforms agreed upon,” the spokesperson told Reuters, adding that past DPO loans averaged about $750 million.

In May, the World Bank approved the latest round of DPO loans, totalling $1.2 billion.

According to a statement made last month by Finance Minister John Mbadi, Kenya has set a foreign borrowing goal of 168 billion shillings for the fiscal year ending in June 2025.