Egypt's non-oil private sector economy turned the corner in November after more than two years of deterioration as a spate of economic reforms including the devaluation of the country's currency and a reduction in energy subsidies began to bear fruit, according to a PMI gauge.
The Emirates NBD Egypt Purchasing Managers' Index rose to 50.7 in November from 48.4 in October. A reading above 50 suggests that the non-oil economy is growing, while a reading below 50 suggests a contraction. The survey is sponsored by Emirates NBD, Dubai's biggest bank by assets, and produced by IHS Markit, a financial information services company.
"Egypt's PMI reading turned positive in November, signaling an expansion in the non-oil sector for the first time in two years," said Daniel Richards, Middle East and North Africa economist at Emirates NBD.
"This suggests that the wide-ranging economic reforms embarked upon in November 2016 as part of an IMF-sponsored program are beginning to bear fruit. Strong sentiment towards future prospects chimes with our view that the Egyptian economy will continue to strengthen over the coming quarters."
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Foreign demand for Egyptian goods and services reached a record high last month. Most of that demand came from an increase in demand from neighboring countries, IHS Markit found, based on anecdotal evidence.
The survey found that the purchasing managers polled in over 450 private sector companies were positive about future growth because of an expected uptick in economic growth.
