Remittances spike in May
Remittance inflows from Egyptians working abroad rose almost 50% in May to USD 2.6 bn, up from USD 1.8 bn in May 2020, according to central bank figures (pdf) released this morning. Expats sent some USD 28.5 bn back home during the first 11 months of the fiscal year (July 2020-May 2021), up 13% from the same period a year earlier.
Inflows held up well through the pandemic: Remittances shrugged off covid lockdowns and the global oil price crash to rise 7% to USD 29.2 bn during 2020. In the second quarter — during which the initial wave of covid coincided with a historic slump in the price of oil — inflows slipped 10% y-o-y, only to rebound immediately the following quarter, reaching a multi-year high of more than USD 8 bn. Many analysts had issued more apocalyptic forecasts for Egyptian remittances, which rely heavily on expats living in Gulf economies that were hit hard by the oil crash and months of lockdown.
Inflows have remained above pre-pandemic levels since, coming in at USD 7.9 bn in the most recent quarterly balance of payments report in 3Q2020-2021.
Remittances are a key source of hard currency for Egypt and have only grown more important since the onset of the pandemic, which shuttered the country’s tourism industry and cut into Suez Canal revenues.