"Egypt's PMI reading dipped back below the neutral 50.0 mark once again in December, dashing hopes that the positive November reading signalled a lasting return to expansion in the Egyptian non-oil private sector," Daniel Richards, MENA economist at Emirates NBD, said. Richards said business confidence remained high, however, with contraction "gentler than most of the past several years."
Output declined in December to 47 from 50.7 the previous month, whene it had expanded for the time in over two years, the survey showed. "Panel members in the non-oil private sector commonly cited a deterioration in inflows of new business from both foreign and domestic markets, with both new export orders and total new business returning to contraction in December," the survey said.
New export orders declined in December after expanding the two previous months, but at a slower rate than the historical series average, the survey showed. Egyptian exports have found new markets since the central bank liberalized the exchange rate in November 2016 as part of a $12 billion International Monetary Fund reform programme. The pound has lost half its value since then.
Stepping up exports is crucial for import-dependent Egypt as it tries to curb its trade deficit and revive its economy, which has suffered since a 2011 uprising scared tourists and investors away.