Egypt Non-Oil Business Slumps

Business activity in Egypt hit its lowest level in more than three years in October, shrinking for a 13th month amid a foreign currency shortage, the pound’s weakness in the black market and accelerating inflation, Bloomberg reported. The Emirates National Bank of Dubai Purchasing Managers Index for non-oil activity fell to 42 from 46.3 the month before, the weakest since July 2013, according to report released Thursday. A level below 50 represents a contraction in business activity. On Thursday morning, the pound free-floated, fulfilling a key condition to finalizing a $12 billion loan from the International Monetary Fund. The survey “highlights the increasingly difficult operating environment confronting Egyptian private sector firms,” Jean-Paul Pigat, senior economist at Emirates NBD, said in the report. “It is difficult to see the situation improving before an IMF agreement is signed, as the ongoing FX shortage and EGP weakness on the parallel market are the main factors undermining economic output at the moment.” The October PMI showed that new orders fell to 36.4 compared to 44.8 the prior month, marking its lowest level since August 2013.