The Manufacturing PMI recovered to the positive territory in June 2016 registering 55.1 index points, from the contraction observed in the last two months, which is an increase of 7.2 index points from May 2016. This improvement was bolstered by the significant increase observed in Production and New Orders Indices. Moreover, all the Sub-indices of PMI, apart from Suppliers’ Delivery Time increased compared to the previous month. Overall data points to an expansion where all the sub-indices apart from the Employment Index are above the neutral 50.0 threshold. The expectations for activities also indicated an improvement for the next three months. On yearon-year basis, the PMI index witnesses a marginal drop of 2.4 index points compared to June 2015.

The external sector performance moderated with an expansion of the trade deficit in March 2016. Earnings from exports declined while imports reduced marginally during the month compared to the previous year. However, during the first quarter of 2016, the trade deficit contracted compared to the corresponding period of 2015 due to the reduction in imports which outweighed the reduction in exports. Tourist earnings and workers’ remittances increased, strengthening the current account of the Balance of Payments (BOP) while inflows to the financial account continued to moderate.

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