Egypt’s Minister of Finance Mohamed Maait has said the improvement seen in the performance of non-oil private sector companies in October’s PMI reflects the Egyptian economy’s resilience amid the novel coronavirus (COVID-19) pandemic.
It also illustrates the ability of companies operating in the local economy to deal with the repercussions of the coronavirus pandemic.
According to a Ministry of Finance statement on Thursday, Maait also said that there remains a gap compared to the economic performance before the pandemic. This, however, can be overcome if the economic improvement continues, alongside the flexibility of measures to combat the pandemic, and the continuation of economic and financial stimulus policies.
The minister said that the PMI, which measures the performance of the 400 largest private sector companies, showed an improvement in private sector confidence in economic performance during October.
The general index scored 51.4 points, an increase of one full point over the previous month, and reflected an improvement for the second consecutive month, indicating a recovery in the economic performance of Egypt’s private sector.
The 50-point level divides between growth and contraction in the main index and its sub-indices.
Maait said that the index number achieved in October 2020 is considered the highest since December 2014. It also reflects an increase in the most important sub-indicators, especially: the production rate, which recorded 53.4 points; new export orders which recorded 54 points; future production which recorded 62 points; and purchases which recorded 54 points.
The total of new orders from domestic sales and exports recorded 53.6 points, an increase of 1.7 points over the previous month, and the highest monthly increase since 2014, Maait added.
The minister also said that it is important to follow up on the private sector’s economic performance, as well as the performance of the Egyptian economy as a whole during the coming period.
Ahmed Kouchouk, Deputy Minister of Finance for Fiscal Policies and Institutional Reform, said that the results of the core index and sub-indicators of purchasing managers for the private sector in October are of particular importance. This is due to there being many positive aspects it contains, related to the performance of the private sector.
Kouchouk also said that this comes through adopting stimulating and supportive financial policies for economic activity, especially for the industrial and export sector. This includes cash payment programmes for exporters’ dues with the Export Development Fund (EDF), and the Ministry of Finance bearing the burden of reducing the electricity cost for the industrial sector by about 9%, starting from April 2020.
He said that these efforts also come with the burdens of reducing natural gas prices for industrial facilities to reach $4.5 per million thermal unit, starting from April 2020, compared to $5.5 previously.