Staying above the neutral level of the PMI indicates a steady recovery in the private sector’s economic performance.
In a statement released on Tuesday, Minister of Finance Mohamed Maait has stated that the Egyptian economy continues to overcome the COVID-19 pandemic, citing the Purchasing Managers’ Index (PMI) and non-oil private sector’s performance in particular.
The Purchasing Managers’ Index (PMI), which measures the performance of 400 of the largest private sector companies, showed an improvement in the private sector’s confidence in Egypt’s economic performance.
The PMI remained above the neutral level of 50 points, scoring at 50.9 points, for the third month in a row. The neutral level is the boundary between growth and contraction in this index, staying above the neutral level indicates a steady recovery in the private sector’s economic performance.
Maait stated that continued business activity and the increase in the volume of new exports for the fifth month in a row are indicative of economic recovery. This can be combined with Egyptian companies seeing improvement in foreign demand, despite the COVID-19 virus, and the seasonally adjusted production index remaining well above average.
The minister mentioned that the improvement in the performance of companies proves the resilience of the Egyptian economy and the ability of companies in the local market to tackle the effects of the pandemic.
He added that there is still a gap, comparing Egypt’s economic performance before the pandemic, however the gap can be closed with continued economic improvement; while also taking into account the flexibility of the measures taken against the global pandemic, and the continued support of economic and financial stimulus policies.
The non-oil private sector’s PMI for November displayed a significant increase in activity, as the volume of customer demand increased for 400 of the largest companies operating in the manufacturing, wholesale and retail trade, services, and construction industries.
The rate of increase in the companies’ production can be attributed to the flexibility of the government’s restrictions applied to curb the Coronavirus, and to the positive effects of the financial and economic incentive policies implemented by the Egyptian government, added the minister.
Deputy Minister for Financial Policies and Institutional Development Ahmed Kouchouk mentioned in the report that they aim to continue improvement during the coming months by adopting stimulating financial policies and support for economic activity. Continued monitoring of the situation will be important, as the second wave of the pandemic continues to hit the world and slow down economic recovery, he added.
The statement also notes that Egypt’s fiscal policy will take these concerns into consideration, including the decline of employment rates in the private sector, where positions left by the recently retired, or those who simply left, have not been replaced.
