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Monday, 4 July 2016

BoP worsens in 3Q2015-16 on weak current account performance

Egypt’s balance of payment deficit for 3Q2015-16 widened to USD 3.64 bn from USD 1.05 bn in 3Q2014-15 on the back of a current account deficit that increased to USD 14.47 bn from USD 8.35 bn a year earlier, according to central bank data. The wider current account was caused by a USD 4.51 bn y-o-y drop in transfers to USD 12.44 bn as remittances dropped to USD 12.38 bn from USD 14.34 bn a year earlier and financial assistance and transfers to the government plummeted to USD 60.7 mn from the USD 2.61 bn recorded in 3Q2014-15. A smaller services surplus compared to last year was also recorded, as income from the Suez Canal fell USD 204 mn y-o-y to USD 3.88 bn and, more significantly, on lower tourism receipts that decreased to USD 3.26 bn from USD 5.47 bn in the first three quarters of 2014-15. This was partially balanced out by a slightly improved trade deficit as both petroleum product imports and exports fell, albeit the latter at a slower rate. The upside is that net inflows to Egypt increased to USD 13.91 bn from USD 6.65 bn a year earlier as FDI recorded USD 5.85 bn in 3Q2015-16, compared to USD 5.11 bn in 3Q2014-15 along with increases in short-term credit and other assets and liabilities. The complete report can be downloaded here.

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