Egypt

Egypt’s Purchasing Manager’s Index (PMI) – an indicator of activity in the non-oil sector – remained in contractionary territory in February, after reaching its lowest level in nearly three years a month prior. The drop in activity was linked once again to a decline in new orders as domestic demand softened even further. Export orders also dropped sharply – linked to a slowdown in global demand amid growing Covid-19 fears. We expect demand for Egypt’s exports to continue to decline in coming months, as some of the country’s main trading partners (including Italy and China) undergo city-wide shutdowns to contain the spread of the coronavirus. A two-week home order and a night-time curfew in Egypt will also weaken domestic demand, while foreign funding for infrastructure is expected to slow, as investors wait for markets to stabilise. Although the government’s recently announced stimulus and bailout package to the value of almost E£100bn should boost government consumption and provide some stimulus for economic growth, muted domestic and global demand conditions will weigh heavily on the economy going forward. Overall, we have revised our forecast for real GDP growth downwards to 3.6% in 2019/20 FY, and 4.5% p.a. over the next three FYs. (Source: Egypt Quarterly Update, published March 2020.)

Macroeconomic Data

(2019)