Kuwait's economy marked a positive shift, with its PMI climbing to 53.5 in July, up from 53.1 the previous month. This growth underscores the ongoing strength in Kuwait's non-oil sectors, including construction and services, contributing to sustained economic performance. The increase in PMI suggests that private sector businesses in Kuwait have managed to overcome some of the challenges posed by global economic slowdowns and rising commodity prices, which have impacted various sectors globally.
Qatar also maintained its momentum, with a PMI of 51.7, signalling expansion in the non-oil economy. The construction and hospitality sectors in particular have benefited from the continued demand for infrastructure development and tourism, as the country continues to position itself as a key destination for international events and investments. Although growth was slower compared to Kuwait, the stability in Qatar's non-oil sector remains a critical factor in its broader economic outlook.
The UAE, with its highly diversified economy, showed a similar trend. Although the growth rate was slightly more modest than in Kuwait and Qatar, the nation's non-oil business activity expanded. The UAE has consistently attracted foreign direct investment and continued to diversify its economy away from oil reliance, with sectors such as technology, healthcare, and financial services seeing notable gains. In July, the PMI stood at a robust level, signalling confidence in the broader economic environment.
Meanwhile, Egypt displayed signs of resilience, albeit with challenges still looming. Its PMI for July rose to 48.9, up from 48.1 in June, indicating a less pronounced contraction compared to previous months. While still below the neutral 50.0 mark, this slight improvement suggests that Egypt's non-oil economy may be on the cusp of a more substantial recovery. The country has been grappling with high inflation and currency devaluation, but efforts to secure international financial support and implement structural reforms appear to be bearing fruit, offering a glimmer of hope for future stability.
Lebanon, on the other hand, remains in a precarious position. The country's PMI for July continued to languish below 50, signalling a contraction in business activity. Lebanon's non-oil economy continues to face significant headwinds, with political instability, inflationary pressures, and ongoing financial crises weighing heavily on the private sector. The collapse of the Lebanese pound, compounded by the lack of sufficient foreign aid and investment, has left the country struggling to regain any meaningful growth momentum. As of July, no clear path to economic recovery has emerged, and businesses continue to operate in an environment marked by uncertainty.
The divergent trends across the Middle East reflect the varied economic conditions in the region, where some nations have capitalised on diversification efforts and reforms, while others continue to battle the effects of political instability and external shocks. The non-oil sectors, which have been a focal point for many Middle Eastern countries in the wake of fluctuating oil prices, continue to show resilience in some areas, despite broader regional challenges.
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