Egypt’s unemployment rate returned to pre-pandemic levels in 3Q2020, falling to 7.3% after the government eased lockdown restrictions in late June, according to figures from the state statistics agency Capmas. Unemployment stood at 7.8% in the same quarter of last year and hit a near two-year high of 9.6% in 2Q2020 as the covid-19 pandemic weighed on business conditions.

Recent PMIs have painted a mixed picture of the job market: Companies continued to cut jobs in July and August following the lockdown, and following a brief respite in September as business conditions began to improve, unemployment accelerated in October despite rising output. Employment as measured by IHS Markit’s PMI has now fallen for 12 consecutive months.

Monetary easing could be supportive of employment: The surprise 50 bps interest rate cut made by the Central Bank of Egypt (CBE) last week could provide a boost to corporate borrowing in 2021, creating jobs by making it more affordable for companies to grow by taking on financing for capex.