Egypt’s external sector shows clear rebound in 2Q2016-17 BoP report
Egypt records a balance of payments (BoP) surplus of USD 7.0 bn in 1H2016-17, up from an overall deficit of USD 3.4 bn registered a year earlier, according to the central bank’s BoP report. The central bank points specifically to 2Q2016-17, which saw the EGP flotation, and registered USD 5.1 bn of the BoP surplus recorded in the half-year period. The current account recorded a deficit of USD 9.6 bn, wider that the USD 9.4 bn registered in 1H2015-16, as it is still being held back by the performance of the tourism sector in the six-month period. The silver lining is that tourism revenues increased by 8.9% y-o-y in 2Q2016-17 in a proportional increase with tourist nights spent in Egypt. Also improved in 2Q2016-17 are remittances inflows, which grew by 35.6% compared to 1Q2016-17 and by 11.9% y-o-y. Witnessing significant inflows was the capital and financial account, which attracted USD 17.6 bn in 1H2016-17, up from USD 6.2 bn a year earlier. Gross FDI inflows were up by USD 1.3 bn to USD 7.4 bn, with net inflows to the oil and gas sector increasing by USD 1.7 bn y-o-y to USD 1.8 bn and net greenfield investments reached USD 2.46 bn in the same period. Portfolio investments were also up and the surge in foreign investments on the EGX and in treasuries increased the net liabilities of the CBE to the external world, implying a net inflow of USD 8.1 bn in 1H2016-17 from USD 1.5 bn a year earlier.
… Separately, the banking system has facilitated USD 21 bn in trade financing operations since the EGP float on 3 November until the end of February 2017, according to an official statement by Central Bank of Egypt assistant sub-governor Tarek Fayed, carried by Al Masry Al Youm. USD 14 bn in documentary collection and letters of credit were fulfilled and USD 7 bn worth of new letters of credit were opened. Separately, the central bank reiterated that it does not have any official social media page on Facebook.