Egypt’s current account deficit fell 64% y-o-y to USD 3.4 bn in 1H2017-18, improving from a deficit of USD 9.4 bn in 1H2016-17, according to a CBE report (pdf) on Thursday. At play: The ongoing rebound in tourism, remittances and an increase in merchandise exports. Egypt’s balance of payments recorded a surplus of USD 5.6 bn in 1H2017-18, down from USD 7.0 bn in the same period last year.

The hard work is yet to be done: “This is a positive development, albeit an expected one, because the economic reforms undertaken so far have largely concentrated on monetary and fiscal issues,” economist Reham El Desoki tells Bloomberg. “To boost exports further, more focus needs to be directed towards cutting red tape and improving the business environment.”

That’s clear in the net foreign direct investment figure, which fell again, closing the first half at USD 3.8 bn from USD 4.3 bn in 1H2016-17. Total inflows declined to USD 6.6 bn in 1H2017-18 from USD 7.4 bn in 1H2016-17. Inflows from investments in the oil sector amounted to USD 2.1 bn.

Reforms need to take hold before we’ll see a rise in FDI: “Foreign investors need to see actual change in how business is conducted in Egypt before committing large amounts of money into the country,” El Desoki said. “I don’t expect large improvement on that front before the end of this year, so the reforms taken would take hold on the ground.”

Portfolio investments was a whole other matter, with net foreign holdings in Egypt’s T-bills growing to USD 8.1 bn in 1H2017-18, up from USD 686.7 mn a year earlier. Inflows from a burgeoning the carry trade and equity investments saw inflows reach USD 8 bn the first half of the year, up from USD 212.9 mn in 1H2016-17.

The great tourism rebound of ‘17 was the largest contributor to the decline in the account deficit. Net tourism receipts for the quarter grew nearly USD 4 bn to USD 3.8 bn, up from a deficit of USD 157.4 mn in 1H2016-17.

Remittances were the second major driver of the narrowing current account deficit, with net remittances growing by USD 3 bn to USD 13.1 bn in 1H2017-18.

Suez Canal revenues grew 10.1% in 1H2017-18 to USD 2.8 bn, up from USD 2.5 bn in the same period last year.

Egypt’s trade deficit declined 1.4% to USD 18.7 bn in 1H2017-18. This largely came on the back of a 15.4% increase in merchandise exports to USD 12.1 bn from USD 10.4 bn in the same period last year. Egypt’s oil exports grew 29.9% to USD 3.8 bn in 1H2017-18 from USD 2.9 bn a year earlier. Non-oil exports rose 9.7% to USD 8.2 bn in the first half of the state’s fiscal year, up from USD 7.5 bn in the same period a year ago. Merchandise imports rose a comparatively muted 4.5% to USD 30.8 bn.

The CBE repaid USD 3.1 bn in the first half in foreign liabilities, against a disbursement of USD 8.1 bn.