Thursday, May 4, 2017
Egyptian economy seems to be bottoming
Emirates National Bank of Dubai (NBD)-Egypt stated that the Egyptian economy is moving towards stability after reaching its lowest level during the last quarter of 2016.
The bank said in its PMI report, which was issued on Wednesday, that the business conditions of non-oil private sector companies in Egypt continued to deteriorate for the ninth month in a row during April, but also announcing that it was slower than over the past months.
According to Tim Fox, head of research and chief economist at Emirates NBD, the slow pace of decline in the main PMI index in Egypt during April is considered an encouraging start for the second quarter (Q2) of the year, especially because it comes after a gradual improvement during the first quarter. It reinforces the perception that after bottoming out in Q4 2016, the economic situation in Egypt is beginning to stabilise.
The main PMI index of Egypt’s rose to the highest level in nine months, recording 47.4 points in April, up from 45.9 points recorded in March.
The Egyptian economy is still contracting but the PMI is moving in the right direction. A reading above 50 would indicate expansion. It is my view that things are moving in the correct direction in Egypt and I coninue to own the Egyptian ETF (EGPT).