News In Focus: Middle East North Africa September 2020

EGYPT: PMI dips marginally in August, remaining in contractionary territory Egypt’s Purchasing Managers’ Index (PMI)—which measures business activity in the non-oil private sector—inched down to 49.4 in August from 49.6 in July. The figure thus ended three consecutive months of increasing readings following April’s nadir of 29.7, which remains the lowest point on record since the current survey began in April 2011 and reflected the effects of Egypt’s first full month with strict coronavirus restrictions.

ISRAEL: Economy registers record contraction in Q2 GDP contracted at a quicker pace of 28.7% in seasonally-adjusted annualized terms (SAAR) in the second quarter, below the 6.8% contraction logged in the first quarter and marking the worst reading on record. On the domestic front, the downturn reflected contractions in private consumption and fixed investment. 

ISRAEL: Composite State of the Economy Index expands meekly in July The Bank of Israel’s Composite State of the Economy Index increased 0.15% month-on-month in seasonally-adjusted terms in July, which contrasted June’s 0.04% contraction. The figure marked the first expansion since January. However, the increase was only mild, suggesting a muted start to Q3 amid the reinstatement of lockdown measures. 

SAUDI ARABIA: Non-oil PMI declines in August as tax hike leads to demand woes The Purchasing Managers’ Index (PMI), produced by IHS Markit, decreased to 48.8 in August after stabilizing at 50.0 in July. Consequently, the index came in below the 50-threshold, indicating worsening business activity in the non-oil private sector over the previous month. August’s result reflected a larger fall in new orders as survey respondents highlighted higher value-added tax (VAT) rates weighed heavily on demand levels. 

SAUDI ARABIA: Oil prices lose some steam in early September Oil prices were down from the previous month in early September, weighed on by softer demand from China and relatively high global supply levels. On 4 September, the OPEC oil basket traded at USD 43.4 per barrel, marking a 2.1% fall from one month ago. Moreover, the price was 26.5% lower than on the same day in 2019 and down 36.2% from the start of the year. 

UAE: PMI drops to contractionary territory in August The IHS Markit Purchasing Managers’ Index (PMI) dropped to 49.4 in August, after remaining above the 50-threshold in July at 50.8. August’s fall was driven by record job losses as businesses attempted to cut costs and reduce prices to increase sales, although output and new orders continued to expand.