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Tuesday, 1 October 2019

Current account deficit widens to USD 8.2 bn in FY 2018-2019

Egypt’s current account deficit widened to USD 8.2 bn in FY 2018-2019, up from USD 6 bn the previous year, according to central bank figures (pdf). Rising imports and a dip in remittances caused the current account to fall further into the red, despite the oil balance turning a surplus and a pick up in tourism revenues.

The balance of payments (BOP) recorded an overall deficit of USD 102 mn against a USD 12.8 bn surplus the year before. BOP figures have slowly recovered over the second half of the year after sinking to a USD 1.77 bn deficit during 1H 2018-2019. Reuters has the breakdown by quarter.

The good news first: The oil trade balance recorded a surplus of USD 8.1 mn compared to a deficit of USD 3.7 bn the year before as “a result of the leap in investments in the oil and gas sector,” the CBE said. Oil exports rose to USD 11.6 bn last fiscal year, up from USD 8.7 bn the year before, as imports fell by 7.6% to USD 11.5 bn from USD 12.5 bn. Egypt halted all imports of natural gas in the second quarter of FY 2018-2019 and gradually lowered reliance on imported oil products and crude.

The non-oil trade balance wasn’t as hot: The deficit widened by 13.4% to USD 38 bn, driven both by a fall in exports and a rise in imports, which the CBE said was partly due to a pick up in economic activity.

Tourism revenues surged to USD 12.6 bn from USD 9.8 bn in 2017-2018.

FDI and portfolio investment fell in FY 2018-2019: Net foreign direct investment fell to USD 5.9 bn from USD 7.7 bn the year before, while net inflows of portfolio investment declined to USD 4.2 bn from USD 12 bn.

Expat remittances slipped to USD 25 bn from USD 26 bn during the year, in a drop that Pharos Holding’s Radwa El Swaify described as “insignificant.”

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