Egypt’s balance of payments recorded an overall surplus of USD 311.4 mn in 1Q2021-22 (which ended in September 2021), compared to a deficit of USD 69.2 mn during 1Q2020-21 (ending September 2020), thanks to strong tourism, Suez Canal, and remittances receipts. “This improvement proved the ability of the Egyptian economy to withstand the negative effects of the covid-19 pandemic facing the global economy,” the central bank said in its latest quarterly balance of payments report (pdf) yesterday.

What’s the balance of payments? You can think of it as the delta between all the money that comes into the country (through tourism, exports, Suez Canal revenues, FDI, remittances, etc) and all the money we send out (largely thanks to imports of everything from food to fuel).

Egypt’s current account deficit continued to increase in 1Q2021-22 on the back of higher import costs. The deficit increased by 43% to USD 4 bn during the quarter versus USD 2.8 bn a year ago as the amount spent on non-oil imports increased due to greater imports of medical supplies to combat covid-19 and the rising cost of wheat and raw production materials, according to the CBE. Higher oil prices were also a factor.

Quarter on quarter, there was a fair bit of good news:

• Exports had their best quarter in at least 18 years, with export revenues coming in at USD 8.9 bn during the three-month period.
• Tourism revenues jumped hit USD 2.8 bn (+60% from 4Q2020-21 and up 250% from the same quarter the previous year)
• Suez Canal + remittance revenues were both up

That said, we spent more on imports. They came in at USD 19.9 bn, up 34% from the same quarter a year ago (when activity was depressed thanks to the pandemic), but up only fractionally from USD 19.6 bn spent the previous quarter. You can thank global oil prices as well as imports of wheat, vaccines and other medical products for pushing the import bill up.

FDI inflows are yet to recover fully from the covid-induced downturn, rising 4% to USD 1.7 bn from a year ago. Investment in the non-oil sector rose almost 30% but the oil sector — which is responsible for almost half of Egypt’s FDI — saw net outflows of USD 489 mn.

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ON A RELATED NOTE-

Petroleum exports rose 84.3% in 2021, posting USD 12.9 bn, compared to USD 7 bn in 2020, Oil Minister Tarek El Molla told Reuters. This came on the back of a five-fold increase in our LNG and natural gas exports, which reached USD 3.9 bn, as well as a 32% rise in crude oil exports to USD 3.3 bn. The restarting of the Damietta LNG plant helped boost our exports, with Egypt’s LNG terminals running at full capacity by December. Petroleum exports hit USD 5 bn in the fourth quarter of the calendar year alone, calculating based on official data for January-September.

Total export revenues reached a record high of USD 45.2 bn last year, Prime Minister Moustafa Madbouly said during a press conference, according to a cabinet statement. That would mean that exports recorded USD 20 bn in the fourth quarter alone, based on official data for the first nine months of the year. The full-year figure marks an 80% increase on 2020, when total exports hit USD 25 bn, according to official data.

And FinMin could seek to boost exports further by tweaking the subsidy program: The Finance Ministry is considering reducing to 8% the current 15% haircut exporters take to get overdue subsidy payments in a single lump sum, Al Borsa quoted Finance Minister Mohamed Maait as saying in a meeting of industry heads.