Egypt’s Non-Oil Private Sector Shrinks Despite Investment Deals
In a disappointing turn of events, Egypt’s non-oil private sector continued to shrink in April, despite the recent $35 billion investment deal with the UAE and an $8 billion International Monetary Fund agreement. According to a survey released on Wednesday, the S&P Global Purchasing Managers’ Index for Egypt dipped to 47.4 in April, down from 47.6 in March, marking the 41st consecutive month of contraction.
Employment Declines as Business Activity Falls
Business activity in Egypt fell significantly in April, leading to a decline in employment, with the employment sub-index dropping to 49.7 from 50.8 in March. Despite the initial payout of $820 million from the IMF in April, the country is still facing challenges.
Positive Outlook from Fitch Amidst Challenges
On a positive note, global ratings agency Fitch revised Egypt’s outlook to positive from stable, affirming its rating at ‘B-.’ The agency cited reduced external financing risks and stronger foreign direct investment as reasons for the change in outlook.
Steps to Improve Public Debt Sustainability
Fitch also mentioned that steps taken to contain off-budget spending in Egypt should help reduce public debt sustainability risks. With foreign investors showing confidence in the country through investments and support, Egypt is working towards economic stability despite ongoing challenges.
Challenges and Positive Outlook for Egypt’s Economy
Egypt’s economy, straddling North Africa and West Asia, has been facing persistent challenges due to foreign currency shortages. However, with recent investments and agreements in place, there is hope for stability and growth in the future. Moody’s also revised its outlook on Egypt to “positive,” indicating a potential turnaround in the country’s economic fortunes.