RIYADH: Kuwait’s non-oil private sector returned to growth in July, with the Purchasing Managers’ Index rising to 50.8 from 46.4, while Egypt’s PMI remained in contraction territory for a seventh consecutive month.
The latest S&P Global PMI surveys showed Kuwait’s headline reading moving back above the neutral 50-point threshold for the first time in five months, supported by the resumption of air travel following the reopening of the country’s airspace, which boosted output and new orders.
Kuwait’s improving business conditions align with a broader economic recovery.
The International Monetary Fund expects the country’s economy to grow by 3.8 percent in 2026, supported by the unwinding of OPEC+ production cuts and continued non-oil growth, while public investment and structural reforms are expected to further strengthen private sector activity over the medium term.
Andrew Harker, economics director at S&P Global Market Intelligence, said: “A period of relative calm in late June and early July and a resumption of air travel led to a return to growth in Kuwait’s non-oil private sector at the start of the third quarter of the year, and renewed optimism in the future.
“Rates of growth and business confidence remained below those seen immediately prior to the start of the war, however.”
He added: “It remains to be seen whether these improved trends can be sustained into August, given the renewed hostilities seen in recent weeks.”
Egypt remains under pressure
Egypt’s PMI also improved from June’s 41-month low of 46 to reach 46.8, but the reading was still below the neutral 50-point threshold, signaling a continued deterioration in non-oil business conditions, according to the reports.
The survey also comes as the country’s broader economic outlook continues to improve. The IMF recently said Egypt’s economy grew 4.4 percent in fiscal year 2024/25, supported by stabilization measures, easing inflation, and stronger investor confidence, while stressing that continued structural reforms will be key to securing durable, private-sector-led growth.
“The upshift in business confidence in July showed that firms saw some light at the end of the tunnel,” said David Owen, principal economist at S&P Global Market Intelligence, adding: “Although the current demand slump continued to pressurize businesses to reduce their operating capacity, a much softer increase in input prices signaled that spending levels may start to turn.”
He went to say that the slowing of inflationary pressures largely relied on the cooling of global oil prices that was most apparent at the start of July, a trend that reversed somewhat as the Middle East conflict flared up again.
”As such, we may see renewed upside risks to domestic cost pressures that could scupper predictions of a recovery in new business,” said Owen.
Qatar inflation edges higher
Qatar’s consumer price index, the country’s main measure of inflation, rose 2.21 percent year on year in June to 110.12 points, while edging up 0.06 percent from May, according to data released by the National Planning Council. The index covers 12 main categories of consumer goods and services based on the 2017-18 Household Income and Expenditure Survey.
The monthly increase was driven by higher prices in transportation, which rose 2.18 percent, followed by food and beverages at 0.98 percent, clothing and footwear at 0.40 percent, and housing, water, electricity, gas and other fuels at 0.33 percent.
Prices fell 2.68 percent for other goods and services, 2.01 percent for recreation and culture, and 0.43 percent for communications, while five major categories — tobacco, furniture and household equipment, health, education, and restaurants and hotels — remained unchanged.
