Skip to content Skip to Search
Skip navigation

Egyptian business confidence improves but pessimism remains

Workers at a textile factory in Bilbeis, Egypt. S&P Global says businesses may soon be able to expand their output Alamy/Claudia Wiens via Reuters
Workers at a textile factory in Bilbeis, Egypt. S&P Global says businesses may soon be able to expand their output
  • S&P releases latest PMI survey
  • Economy just shy of achieving growth
  • Businesses ‘on road to recovery’

Egyptian businesses reported significant new sales for the first time since 2021 in June but are still more pessimistic than optimistic, according to the latest purchasing managers index (PMI) report.

The survey released by S&P Global reported a headline PMI of 49.9, the highest in almost three years and just shy of the 50.0 mark that separates growth from contraction. 

The survey has remained under 50 for 43 consecutive months, but in a note accompanying the survey, senior economist David Owen said that “businesses appear to be heading on the road to recovery”.



“If we see further rises in sales and purchases in the second half of this year, firms should have the motivation and need to expand their output,” Owen said.

The report’s publication coincides with the formation of a new Egyptian cabinet, which saw 20 new appointees including to the ministries of finance and energy. 

A new fiscal year which began on Monday introduced an austerity budget that aims to reduce Egypt’s debt-to-GDP ratio from above 90 percent to below 80 percent by 2027.

It follows a turbulent economic period marked by double-digit inflation and a shortage of foreign liquidity, exacerbated by a black market currency rate which saw the US dollar changing hands at more than double the official rate against the Egyptian pound at the start of the year.

Egypt’s economic situation has eased since a $35 billion investment deal was signed in March with ADQ, a UAE sovereign wealth fund, along with a devaluation of the pound and loan agreements from the International Monetary Fund and others. 

The new government must now grapple with awkward decisions on selling off state-owned companies and lifting heavy subsidies on bread and fuel

Thursday’s survey did not cite challenges accessing foreign currency, a problem frequently reported by Egyptian businesses even in the months after the March devaluation when the Egyptian pound depreciated 38 percent against the US dollar to $1=EGP49.5. The pound has since strengthened slightly to EGP47.9.

Egypt shows signs of recovery after landmark IMF deal

Deals between European and Egyptian companies worth $43bn

Sharia index is tentative step for Islamic finance in Egypt

Urban consumer price inflation dropped to 28 percent in May, down from a September peak of 38 percent; foreign reserves reached a record $46 billion the same month.

Goldman Sachs has predicted that inflation will drop 10 percent by June 2025, stabilising at around 10 percent by the end of that year.

"Price pressures have remained much cooler than in the first quarter of this year during the country's foreign currency crisis,” wrote Owen. “While June saw the fastest rise in input prices for three months, firms generally commented that this was due to a high degree of volatility in market prices rather than an accelerating inflation trend.”

Latest articles

Suriname oil

QatarEnergies buys into Suriname oil expansion

The state-owned giant QatarEnergy has signed a deal with US oil company Chevron to acquire a 20 percent interest in a production-sharing contract for an offshore concession in the South American country of Suriname. Chevron will keep a 40 percent interest in Surname’s block 5, as will Paradise Oil, an affiliate of Suriname’s national oil […]

Rakbank

Rakbank plans first bond to fund social projects

The National Bank of Ras Al Khaimah (Rakbank) is planning to launch its first social bond issuance, a news report has said. The Abu Dhabi-listed bank is seeking bids for the five-year benchmark-sized dollar-denominated bond, Reuters reported. The initial price was set at 170 basis points over US Treasuries, with the final pricing expected on confirmed […]

The proposed sharia standard 62, which aims to transition the industry towards asset-backed sukuk, will not affect 2024 issuance, says S&P

Sharia standard 62 may disrupt sukuk market, says S&P

Global sukuk issuances are likely to suffer next year if the proposed standard 62 sukuk changes to sharia guidelines are implemented, according to credit rating agency S&P. “Adopting Accounting and Auditing Organization for Islamic Financial Institutions standard 62 guidelines as they have been presented could disrupt the market,” it said in a new report. The […]

Videos released last month show construction of the Royal Arts Complex at King Salman Park is well underway

Full steam ahead on ‘largest urban park in the world’

Saudi Arabia is forging ahead with construction of what it calls the “largest urban park in the world”, publishing videos of its first buildings under construction after a tunnel opened earlier this year.  King Salman Park in Riyadh is owned by the Public Investment Fund and was recently valued by real estate consultancy Knight Frank […]