Egypt's BOP records $991.2 mln deficit in Q1 of FY24/25

The CBE attributed this shift primarily to a widening current account deficit, which surged to $5.9 billion in Q1 FY 2024/2025, up from $2.8 billion during the same period last year. 

This deterioration was driven mainly by a $6.1 billion increase in the trade deficit and a 22.1 percent decline in the services surplus, which dropped to $4.1 billion. 

The decrease in the services surplus was primarily due to a fall in Suez Canal transit receipts. 

Despite these challenges, the negative impact of the current account deficit was partially mitigated by a significant 84.7 percent increase in current transfers, which rose to $8.4 billion. 

This improvement was mainly attributed to a substantial rise in remittances from Egyptians working abroad and increased tourism revenues. 

Egypt saw some relief on the capital and financial account, with net inflows reaching $3.8 billion in Q1 FY 2024/2025, compared to $1.8 billion in the same period last year. 

Foreign Direct Investment (FDI) in Egypt contributed significantly, with net inflows of $2.7 billion in Q1 FY 2024/2025, easing pressures on the BOP. 

Oil and non-oil trade deficit expands 
 

The oil trade balance deficit widened by $2.9 billion, reaching $4.2 billion in Q1 FY 2024/2025, up from $1.3 billion in the same period last year.  

This expansion was attributed to a decline in exports and an increase in imports, particularly oil products and natural gas. 

Oil imports surged by $2.5 billion, totalling $5.4 billion, as oil product and natural gas imports nearly doubled.  

Conversely, reduced quantities decreased crude oil imports by $191.9 million. 

Oil exports dropped by $415.8 million, amounting to $1.2 billion, driven by a decline in crude oil and natural gas exports, which fell by $526.6 million and $24.2 million, respectively. 

The non-oil trade deficit also expanded by $3.2 billion, reaching $9.8 billion in Q1 FY 2024/2025, compared to $6.6 billion in the same period the previous year.  

This increase was attributed to a $4.4 billion rise in non-oil merchandise imports and a $1.2 billion increase in non-oil merchandise exports.  

Notable increases in imports included wheat, soybeans, pharmaceuticals, and spare parts for electric appliances, while exports rose primarily in fresh and dried fruits, aluminium, vegetables, and wires and cables. 

Remittances and tourism revenues surge 
 

Remittances from Egyptians working abroad surged by 84.4 percent, reaching $8.3 billion in Q1 FY 2024/2025, up from $4.5 billion the previous year.  

The CBE also reported a 7.2 percent decrease in the investment income deficit to $4.3 billion, driven by a 60 percent increase in investment income receipts. 

Tourism revenues grew by 8.2 percent, reaching $4.8 billion in Q1 FY 2024/2025, up from $4.5 billion in the same period last year, fueled by an increase in the number of tourist nights. 

FDI inflows show positive growth 
 

FDI inflows into Egypt’s non-oil sectors also increased, with net inflows reaching $2.9 billion, compared to $2.6 billion in the previous year. 

This was driven by proceeds from the sale of local entities to non-residents, totalling $304.9 million, up from $15.4 million last year.  

Net inflows from greenfield investments and capital increases in existing companies totalled $1.1 billion, and net real estate investments by non-residents amounted to $359.4 million. 

The data indicated a decline in net foreign direct investment (FDI) outflows in the oil sector to $175.7 million in Q1 FY 2024/2025, compared to $247.8 million in the same period last year.

This decrease was mainly driven by lower outflows, which are payments for exploration, development, and operations by foreign partners, falling to $1.4 billion from $1.6 billion. 

Meanwhile, inflows into the oil sector, representing new investments from foreign oil companies, decreased to $1.2 billion, down from $1.4 billion.

Suez Canal revenue declines
 

Suez Canal transit revenues dropped significantly by 61.2 percent, falling to $931.2 million in Q1 FY 2024/2025 from $2.4 billion in the same period last year.  

This decline was attributed to a 68.4 percent reduction in net tonnage, with only 127.2 million tons transiting the canal and a 51 percent decrease in the number of vessels passing through.  

Factors such as the ongoing tensions in the Red Sea and rerouted shipping paths due to maritime threats have contributed to this downturn, and experts predict further revenue reductions. 

Decline in e-card payments abroad 
 

Payments made through e-cards abroad also saw a significant decline, falling by 59.7 percent to $406.7 million in Q1 FY 2024/2025, compared to $1 billion in the same period last year. 

Despite these challenges, the overall picture for Egypt’s economy remains one of mixed results, with increasing remittances, higher FDI, and a rebound in tourism revenues, offering some relief amidst the broader economic difficulties.