New export orders increased for the fourth consecutive month in July and new orders overall have stabilised, ending a 21-month straight decline, according the Markit / Emirates NBD Egypt PMI. Overall, with the PMI reading registering 48.6 in July, the downturn in the health of the economy eased in July and output declined at the slowest pace in 12 months, thereby leading to only a marginal fall in input buying. “Egypt’s economy appears to be stabilizing, with new orders unchanged in July following nearly 2 years of contraction. However, firms saw input costs rise sharply on the back of higher fuel costs as subsidies were cut further at the end of June. Inflationary pressure is likely to remain elevated as higher electricity tariffs came into effect this month,” commented Khatija Haque, Emirates NBD’s head of MENA research. The report also notes that “firms remained optimistic with regards to output growth over the next 12 months. Some companies mentioned hopes of stability in currency markets and economic conditions.”

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