Egypt’s current account deficit more than doubled to $5.9 billion in the first quarter of fiscal year 2024-2025 (July-September 2024), compared with $2.8 billion in the first quarter of last fiscal year, the central bank said in its latest release.
Transactions of the Egyptian economy with the external world resulted in an overall balance of payments deficit of $991.2 million compared to an overall surplus of $228.8 million in the same period last year.
Oil imports rise $2.5 billion
The central bank attributed the surge in Egypt’s current account deficit to several factors including the rise in the non-oil trade deficit to $9.8 billion in July-September 2024, compared with $6.6 billion during the same period last year. The deficit of the oil trade balance also widened by $2.9 billion to $4.2 billion.
Oil imports rose by $2.5 billion to $5.4 billion due to higher imports of both oil products and natural gas by $1.5 billion and $1.2 billion, respectively. Meanwhile, crude oil imports retreated by $191.9 million. On the other hand, oil exports declined by $415.8 million to reach only $1.2 billion. However, exports of oil products increased by $135 million.
Suez Canal transit receipts plummet 61.2 percent
Another factor contributing to the surge in Egypt’s current account deficit was the major decline in Suez Canal transit receipts which fell 61.2 percent to $931.2 million in Q1 compared to $2.4 billion a year earlier.
The central bank revealed that net tonnage declined 68.4 percent to just 127.2 million tons and the number of transiting vessels fell 51 percent. Ongoing Red Sea tensions continued to impact maritime navigation in the Suez Canal, which forced several shipping companies to divert their shipping routes.
Remittances and tourism revenues offset Suez Canal losses
Despite the significant fall in the Suez Canal revenues, several factors mitigated the rise in Egypt’s current account deficit. Remittances from Egyptians working abroad rose 84.4 percent to $8.3 billion in Q1, up from $4.5 billion during the same period last fiscal year.
Tourism revenues gained 8.2 percent to $4.8 billion amid the rise in the number of tourist nights to 51.6 million nights. On the other hand, payments via e-cards abroad decreased by 59.7 percent to $406.7 million.
Meanwhile, the investment income deficit fell 7.2 percent to $4.3 billion due to the rise in investment income receipts by 60 percent to $660.6 million, and the slight decrease in investment income payments by 1.6 percent to $4.9 billion.
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FDI inflows rise to $2.7 billion
The central bank also revealed that capital and financial accounts recorded a net inflow of $3.8 billion compared to $1.8 billion last year. FDI net inflow in Egypt rose to $2.7 billion from $2.3 billion last year. In addition, net outflows of portfolio investments in Egypt retreated to only $384.7 million compared to $523.4 million last year.
Meanwhile, banks’ foreign assets registered a net inflow of $2.1 billion against a net outflow of $731.0 million.
