May 08, 2024 (MENAFN via COMTEX) --
(MENAFN) In spite of major economic agreements aimed at bolstering Egypt's non-oil private sector, a recent survey released on Wednesday revealed that the sector continued to experience contraction in April. This contraction comes despite a notable USD35 billion investment agreement with the United Arab Emirates (UAE) signed in February and an expanded loan agreement worth eight billion dollars with the International Monetary Fund (IMF) in March.
The Standard & Poor's Global Purchasing Managers' Index (PMI) for Egypt declined to 47.4 points in April from 47.6 in March, remaining below the critical 50-point threshold that distinguishes growth from contraction for the forty-first consecutive month. Standard & Poor's Global noted that business activities faced significant declines due to challenging market conditions, leading to a further reduction in employment levels. The employment sub-index dropped to 49.7 points in April from 50.8 in March, indicating a contraction in employment opportunities within the sector.
Despite Egypt's agreement with the IMF in March, which included an initial payment of USD820 million received in April, the country continues to grapple with economic challenges exacerbated by the crisis in the Gaza Strip. The IMF acknowledged the economic shocks Egypt faces and emphasized the importance of structural reforms. As part of the agreement, Egypt devalued its currency on March 6 and implemented a substantial interest rate hike of 600 basis points.
While certain sub-indices of the PMI showed slight improvements, such as the production sub-index rising to 44.8 points in April from 44.5 in March, and the new orders index improving to 45.5 from 45, the overall trend indicates ongoing contraction within the non-oil private sector.
In summary, despite significant financial support and agreements aimed at stimulating growth, Egypt's non-oil private sector continues to grapple with contractionary pressures, highlighting the persistent challenges facing the country's economic recovery efforts.
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COMTEX_452090421/2604/2024-05-08T20:21:41
