Egypt business activity shrinks in March

Business activity in Egypt slowed marginally in March after stagnating the previous month, according to a poll released on Thursday - a sign the economy remains fragile after years of political and economic turmoil.

The HSBC Egypt Purchasing Managers Index (PMI) for the non-oil private sector stood at 49.8 points in March. That was down from 50 in February.

Readings above 50 indicate expansion; below 50, contraction. The index had been below 50 for 13 months through October.

“Evidence of stabilisation is welcome, but after three years of such heavy economic losses it’s not enough,,” Simon Williams, the chief Middle East economist at HSBC, said in an accompanying statement.

“The weak readings for output, new orders and employment point to an economy that continues to drift,” Williams said. “The continued gains in input costs suggests inflationary pressures will remain high.”

The Egyptian economy has been hit by three years of political turmoil since a popular uprising ousted autocrat Hosni Mubarak in 2011. It grew just 1.2 percent in the six months through December, and the government has lowered its growth target for the fiscal year ending in June to a maximum of 2.5 percent.