RIYADH: Business conditions in Kuwait’s non-oil private sector continued to expand in May, while Egypt experienced a slower pace of contraction, offering tentative signs of stabilization. 

According to the latest Purchasing Managers’ Index surveys released by S&P Global, Kuwait’s PMI stood at 53.9, down slightly from 54.2 in April but remaining comfortably above the 50 no change mark. 

Meanwhile, Egypt’s PMI rose from 48.5 in April to 49.5 in May, its highest level in three months, but still below the neutral 50.0 threshold that separates growth from contraction. 

In Kuwait, non-oil firms reported strong growth in both output and new orders, extending a streak of expansion to 28 consecutive months. 

Respondents attributed the uptick to competitive pricing strategies and enhanced marketing efforts. 

Kuwait’s expansion aligns with broader economic projections by the International Monetary Fund and the World Bank, with real gross domestic product growth forecasts of 1.9 percent and 3.3 percent, respectively, in 2025. 

These projections reflect a recovery from two consecutive years of contraction, supported by rising oil production as OPEC+ cuts ease, and expanding non-oil activity led by infrastructure development and credit growth. 

“The strong growth seen in April was largely maintained in May, with companies in Kuwait again reporting sharp increases in output and new orders,” said Andrew Harker, economics director at S&P Global Market Intelligence. 

“This sustained expansion is putting pressure on firms to build capacity, and extra staff were hired accordingly in May,” he added. 

Employment rose for the third consecutive month, and the rate of job creation was the joint-fastest recorded since the PMI series began in 2018. 

However, staffing growth remained modest overall and did not fully alleviate rising backlogs of work. 

“The pace of job creation was still only modest, however, and backlogs of work continued to rise, so we may see even greater employment growth in the months ahead,” Harker added. 

Purchasing activity also increased for the second month running, and firms reported a solid build-up in input inventories. Supplier performance improved, with delivery times shortening for the third consecutive month. 

Cost pressures intensified midway through the second quarter, driven by rising prices for advertising, transport, staffing, food, and stationery. 

Input price inflation accelerated to its highest level since March 2024, prompting firms to raise output prices at the sharpest rate in nearly a year. 

Despite these challenges, business confidence reached a 12-month high in May, with 36 percent of respondents expecting output to grow over the next year. 

Optimism was supported by stronger demand, competitive pricing, and ongoing marketing activity. 

Egypt en route to stabilization 

In Egypt, although the non-oil private sector remained under pressure, the pace of deterioration in business conditions slowed. 

The headline PMI of 49.5, up from 48.5 in April, indicated the mildest contraction since February. 

The improvement came amid softer declines in both output and new business, aided by a rebound in the manufacturing sector. 

Egypt’s softer PMI contraction in May aligns with the IMF’s upward revision of the country’s growth forecast to 3.8 percent for 2025, signaling emerging signs of resilience in the non-oil economy. 

“Output and new orders fell at the slowest rates for three months,” said David Owen, senior economist at S&P Global Market Intelligence. 

“Nevertheless, a number of surveyed firms continued to report softness in market demand, leading them to cut back on purchases and staffing,” he added. 

Companies in Egypt reduced purchasing activity at the fastest rate since October, citing efforts to streamline inventories in response to subdued demand. 

Stock levels of inputs rose only marginally. Employment fell for the fourth consecutive month, though the decline remained mild, driven primarily by a policy of not replacing staff who voluntarily left their positions. 

Egyptian businesses faced the steepest rate of input cost inflation so far in 2025, with price increases reported for fuel, cement, and paper. 

Volatile exchange rates, particularly the weakening of the Egyptian pound against the US dollar, further contributed to supplier price hikes. 

Wage inflation, by contrast, remained modest. After flatlining in April, output prices rose at the fastest pace in seven months as firms passed on part of their rising costs to customers. 

Sentiment in Egypt improved slightly from April, though optimism remained below historical norms. 

“Although many of the key PMI metrics continued to indicate a deterioration in business conditions in May, the overall pace of decline was not as sharp as in April and softer than the survey’s historical trend,” Owen added. 

Persistent cost pressures and weak domestic demand continued to weigh on expectations for future activity. 

Some businesses voiced concern over external headwinds, including global trade uncertainty and the impact of US tariffs. 

RIYADH: Saudi Arabia’s Public Investment Fund-backed digital bank D360 is in early talks with potential global investors as it prepares for a Series A funding round planned for the second half of 2025. 

The Shariah-compliant lender, which began operations in December, is targeting the first quarter of 2026 to complete the raise, CEO Eze Szafir said in an interview with Bloomberg. 

This development follows the bank’s successful securing of around $500 million from existing shareholders, including PIF and Derayah Financial Co. 

While Szafir did not disclose the size of the upcoming round, he told Bloomberg the funding will support the bank’s efforts to expand services to small and medium enterprises, aligning with the Kingdom’s broader economic diversification strategy under Vision 2030. 

“We’re looking for new investors in the international landscape, most probably from Europe or the US, with the same quality we have here with the PIF and Derayah,” Szafir was quoted as saying. 

D360 also plans to roll out full lending services for individuals and SMEs later this year. 

In preparation for the raise, the company has appointed former JPMorgan Chase & Co. banker Mohammed Nazer as chief financial officer to lead the process. Nazer said the bank expects to appoint advisers to manage the Series A round by the end of July. 

One of the first institutions to be granted a digital banking license in Saudi Arabia, D360 currently serves over 1 million users. It is targeting 4 million account holders ahead of a potential public listing within the next four years. 

By adopting data-driven strategies and modern technologies, D360 aims to contribute to the development of the Kingdom’s digital financial infrastructure and align with the goals of Vision 2030. 

The move comes as the Saudi Central Bank continues to advance regulatory frameworks that support digital transformation in the financial sector. The institution, also known as SAMA, has prioritized fostering innovation and financial inclusion through digital banking, granting licenses to new digital players in a bid to modernize the Kingdom’s banking landscape and strengthen financial resilience. 

This push has helped Saudi electronic payments account for 79 percent of all retail transactions in the Kingdom in 2024, up from 70 percent the previous year, according to SAMA. 

The central bank also reported that the total number of non-cash retail transactions reached 12.6 billion in 2024, compared to 10.8 billion in 2023, reflecting the continued growth and widespread adoption of digital payment systems nationwide.