Egypt’s Non-Oil Private Businesses Almost Stable in May Despite Ongoing Problems
Business activity in Egypt’s non-oil private sector improved in May, as the drop in output and new orders became less severe, according to a survey by S&P Global released on Tuesday.
Egypt’s Non-Oil Business Activity
Egypt’s business activity (excluding oil) improved slightly in May. The S&P Global Egypt Purchasing Managers’ Index (PMI) rose to 49.5 in May, up from 48.5 in April. A score below 50 means business is shrinking, but the drop is slower than before.
Private sector companies in Egypt still saw fewer sales and less work, but the decline was not as bad as in April. The index for business output went up to 49.5 (from 47.4), and the index for new orders rose to 49.1 (from 47.4). This means companies had fewer losses in May.
Even with this slight improvement, businesses reduced their buying and cut jobs for the fourth month in a row.
Costs for companies went up, mostly due to higher prices from suppliers and a weaker exchange rate. Because of this, many businesses raised their own prices to cover the higher costs.
Business confidence stayed low. Some companies were a bit more hopeful about the future, as shown by a small increase in the future outlook index (to 53.0 from 52.7), but overall, expectations remained weak due to worries about high inflation and slow demand.
Key Comment
David Owen, an economist at S&P Global, said that although business conditions were still getting worse in May, the decline was not as fast as in April. He also noted that manufacturing activity grew again, helping slow the overall decline.
Egypt’s Economic Growth
The International Monetary Fund (IMF) expects Egypt’s economy to grow stronger. It raised its forecast for the 2024–25 financial year to 3.8%, thanks to better-than-expected results in the first half of the year.
In May, Egypt’s central bank said the economy grew by 4.3% from October to December. It expects 5% growth from January to March.
The central bank also cut interest rates by 100 basis points (1%). This was less than expected. The cut came after inflation dropped. In April, Egypt made its first interest rate cut in almost five years because inflation had fallen to 13.6%—less than half the peak reached in September 2023.
In April, overall inflation was 13.9%, and core inflation (excluding food and energy) was 10.4%. Lower food prices helped keep inflation in check, even though prices for other goods rose.
Published: 4th June 2025
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