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|10 January, 2019

Egypt non-oil private sector activity shrinks in December, but at slowing rate

Private sector activity has expanded in only five months over the last three years

Image used for illustrative purpose. The 15th May Bridge, which spans the River Nile, and the surrounding buildings are seen in Cairo, Egypt, April 29, 2018.

Image used for illustrative purpose. The 15th May Bridge, which spans the River Nile, and the surrounding buildings are seen in Cairo, Egypt, April 29, 2018.

REUTERS/Mohamed Abd El Ghany

CAIRO - Egypt's non-oil private-sector activity shrank for a fourth month in December, but the rate of contraction slowed from November, the Purchasing Managers' Index (PMI) survey showed on Thursday.

The Emirates NBD Egypt PMI rose to 49.6 from 49.2, remaining below the 50 mark that separates growth from contraction. Private sector activity has expanded in only five months over the last three years.

The contraction was the slowest in the last four months.

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Daniel Richards, MENA Economist at Emirates NBD, said that though activity had shrunk, an expansion in new purchasing activity indicated private sector activity may be about to improve.

"There are other factors within the survey data which suggest that the Egyptian economy will begin 2019 in a relative position of strength," he said.

New orders and employment continued to fall, although at a slower pace than in previous months.

The increase in input prices was its slowest in almost six and a half years, according to the PMI data.

Egypt has been implementing tough economic reforms as part of the three-year $12 billion programme agreed with the IMF in November 2016, including the introduction of a value-added tax, cuts to energy subsidies and a steep currency devaluation.

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(Reporting by Patrick Werr; Editing by Toby Chopra) ((patrick.werr@thomsonreuters.com;))

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