The good news continues: August’s Markit / Emirates NBD PMI for Egypt rose to a “joint” 23-month high with a reading of 48.9 as export orders “rose sharply.” The PMI also pointed to the weakest contraction in output in the 23-month period as new export work increased markedly. “Egypt’s PMI improved further in August, although it remains in contraction territory at 48.9. New orders declined only marginally after stabilizing in July, and new export orders increased at the fastest rate since May. Inflationary pressure remained high in August however, as electricity tariffs were increased last month,” Khatija Haque, Head of MENA Research at Emirates NBD, commented. The report notes that the rate of reduction in output was only marginal, as “panellists commented that higher cost inflationary pressures and unfavourable economic conditions caused the fall in business activity.” Also, “hopes of better economic conditions and stabilisation in currency markets boosted positive sentiment, with the level of confidence the strongest observed in six months.”

…We are in “caution territory,” Emirates NBD Group Head of Research and Chief Economist Tim Fox, tells Bloomberg TV. He says that while the economy is benefiting from export orders, the domestic economy remains lacklustre because of high interest rates (runtime 01:56).