The German IFO business climate index fell further in August, to reach its lowest level since February, highlighting the difficulties currently facing the economy. While the headline measure fell to a value of 86.6, from 87.0 in July, there were declines in both the current assessment and expectations sub-components. On a sectoral basis, the business climate dropped sharply in the manufacturing sector.
Orders for US durable goods moved sharply higher in July, jumping 9.9% m/m, rebounding from a downwardly revised 6.7% m/m decline in June. The outturn was significantly higher than consensus expectations for 5% m/m growth. The headline measure was entirely driven by orders related to transportation, which jumped 34.8%, due to a rise in aircraft orders. Goods orders ex-transport in contrast fell 0.2% m/m.
The IMF published its third review on Egypt’s Extended Fund Facility (EFF) programme yesterday, following a staff report that was completed on June 26. This enables Egypt to immediately draw down on a further USD 820mn which will bolster Egypt’s finances. The review commended Egypt for progress on a number of structural reforms and urged a continuation of the flexible exchange rate regime that was pledged as part of the programme. However, it urged greater efforts on implementing the State Ownership Policy of divesting state assets, and to make greater progress on ensuring a ‘level playing field’ for private sector companies. The fourth review is reportedly going to be pushed back to October, from September previously, potentially in order to take account of expected tax reforms that month, and the completion of amendments to competition laws also due in October.
Consumer price inflation in Bahrain slowed to a 1.1% annual pace of growth in July, down from 1.4% y/y in June. The latest outturn was the first y/y deceleration in price growth in 4 months.
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