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Daily Economic Update
04.11.2025
Kuwait: Non-oil private sector activity accelerates in October according to the latest PMI. According to the latest S&P Global Purchasing Managers’ Index (PMI), non-oil private sector activity in Kuwait picked up pace in October, following a slight easing in September. The increase in the headline PMI reading to 52.8 in October reversed a two-month sequence of deceleration, further confirming the solid expansion that the sector has been undergoing this year and setting up a positive base for the year to come. Output, new orders and employment, the three largest contributors to the PMI, all picked up pace in October, with the output and orders balances in the solid mid-50s. Output price inflation accelerated to a four-month high as firms passed on sharp increases in input costs to customers, though remains at modest levels overall. Business confidence about future prospects was the strongest since June.
Saudi Arabia: PMI in October highest in over 11 years. The non-oil private sector PMI jumped to 60.2 in October from 57.8 in September, reflecting the strongest expansion in business activity since 2014 as operating conditions improved amid stronger demand. Output and new orders grew sharply, supported by a larger customer base and new marketing initiatives, with export orders expanding at the fastest pace since February on stronger international demand. The stronger business activity led to a surge in employment to the highest level in 16 years, with the largest increase coming from the manufacturing sector. The increased staffing helped to curb the pressure on elevated work backlogs, which rose only marginally despite strong growth in business activity. Purchasing activity grew sharply in line with the higher work-load, while inventories grew in line with higher expected business requirements. Input prices increased in October on higher purchase and staffing costs, leading to a notable increase in output prices.
Saudi Arabia: Credit growth eased in September but remains strong. The Saudi Central Bank released its monthly monetary bulletin which showed credit growth easing for the fifth consecutive month in September to 14.3% y/y (10.4% YTD) from 14.6% the previous month. Credit to the private sector softened but remained strong at 13% y/y (13.3% in August), with personal loan growth accelerating to a four-month high of 9.2%, reflecting strength in the consumer sector. In contrast, residential new mortgage financing for individuals fell by 14.7% y/y, the third consecutive month of contraction and the sharpest decline since June 2024, likely affected by signs of moderating activity within the residential real estate market. Meanwhile, deposit growth eased to 7.9% y/y (8.7% in August), despite the strong growth in time and savings deposits (22% y/y), weighed down by subdued growth in demand deposits (2.4%) and a decline in other quasi-monetary bank deposits (-18%). The loan-to-deposit ratio held steady at 111% while the net foreign asset position improved slightly on an increase in foreign assets, but remained negative.
Egypt: Strong demand for local debt as first-ever sukuk issuance sees nearly five-times coverage. Egypt’s local debt market continues to attract robust demand, underscoring strong confidence among domestic banks and investors. The Ministry of Finance’s first-ever local sukuk issuance was nearly 5 times oversubscribed, receiving 63 bids worth EGP 14 billion against an EGP 3 billion target, of which only ten bids were accepted. The strong demand pushed the yield down to 21.56% on the three-year asset-backed sukuk, linked to the Ministry of Finance’s-owned assets in Ras Shukeir on the Red Sea. In light of this strong appetite, the government has increased its planned Sukuk issuance for the fiscal year from EGP 25 billion to EGP 200 billion. The sukuk program forms part of a broader debt diversification strategy aimed at deepening the local market and easing the cost of debt service, which is a priority given that interest payments consume around 80% of state revenues and represent roughly half of total spending. Separately, the CBE’s EUR-denominated T-bill auction also drew solid interest, with bids reaching EUR 708 million for a EUR 600 million offering where the CBE accepted EUR 628 million. The auction cleared at an average yield of 2.25%, unchanged from August and marking a sustained low level not seen since 2022.
US: ISM Manufacturing PMI weakens further; Fed speak confirms the uncertainty about the December meeting. The ISM manufacturing PMI in October sank further into contraction at 48.7 from September’s 49.1, remaining below the 50-neutral mark for an eighth consecutive month as most subcomponents were subdued. Production worsened and new orders eased the pace of decline. Employment continued to shrink for the ninth month, though improving somewhat to a five-month high of 46 from 45.3 in September. Encouragingly, the input price gauge fell to 58, still elevated but its lowest since January and well below the YTD average of 64.4, suggesting early signs of moderation in price pressures. The survey highlighted businesses’ concerns about weakening demand, tariff uncertainty, and rising prices. Meanwhile, several Fed officials sent overall mixed signals about the Fed move at the December meeting. Governor Lisa Cook, who is currently fighting a case against the Trump administration on her removal from the Fed’s Board, saw “greater” downside risks to employment than the upside risks to inflation but didn’t specify her preference to an interest rate decision, noting that December is “a live meeting.” FOMC voting member Chicago Fed President Austan Goolsbee stated being “nervous about the inflation side of the ledger” and that “my threshold for cutting is a little bit higher than it was at the last two meetings”, but also remained undecided about his move in December. Likewise, San Francisco Fed President Mary Daly (non-voting) pitched to “keep an open mind” for the next meeting. However, the recently-appointed Fed Governor Stephen Miran continued to see the monetary policy restrictive in his calls to cut rates aggressively. Given the wide divergence among FOMC members and a dearth of economic data releases due to the ongoing government shutdown, the Fed’s December meeting is certainly poised to be a live one. The futures market is indicating a two-third probability for a rate cut next month, though down from over 90% prior to the last FOMC meeting.