News Details

Egypt's Current Account Deficit Widens to USD 11.2bn in 2019/20 with Egyptian Remittances the Main S

01/12/2020

Egypt’s current account deficit for the FY19/20 has slightly increased to USD 11.2bn from USD 10.9bn in FY18/19, with the majority of the deficit been recorded in the 2H19/20 (Due to Covid-19 outbreak) recording USD 9bn compared to a surplus of USD 1.7bn in the 2H18/19. Of the main figures:

  • Non-Petroleum trade balance deficit recorded USD 36bn in FY19/20 declining from USD 38bn in FY18/19, while petroleum trade balance deficit increased in FY19/20 to record USD 421mn compared to a surplus of USD 8.1mn in FY18/19. 
  • Egyptian Remittances were the main source of foreign currency increased 10.4% recording USD 27.7bn in FY19/20 increasing from USD 25.1bn in FY18/19.
  • Suez Canal revenues recorded USD 5.8bn in FY19/20 compared to USD 5.7bn in FY18/19.
  • Tourism revenues recorded USD 9.9bn in FY19/20 declining from USD 12.6bn in FY18/19. (CBE Release)
  • In Terms of 4Q FY2019-2020,  The Pandemic hasn’t been Kind to Egypt’s Current Account

Egypt’s current account deficit more than tripled to USD 3.83bn in 4Q FY2019-2020 from USD 1.09bn the year before as the pandemic dealt a heavy blow to the country’s sources of hard currency.

  • Tourism revenues collapsed by more than 90% to just USD 305mn, having brought in USD 3.18bn in 4Q FY2018-2019. The industry came to a near standstill in the fourth quarter of the government’s fiscal year as international flights were grounded to prevent the spread of the virus.
  • Trade deficit widens despite hefty fall in imports: Falling exports resulted in the trade deficit widening to USD 8.41bn from USD 8.29bn during the quarter, even as imports dropped by 12% to USD 13.83bn. Exports fell almost 30% y-o-y to USD 5.42bn from USD 7.58bn in 4Q FY2018-2019.
  • Remittances slid during the quarter: Egyptian expats sent USD 6.21bn back home during the three-month period, down 10% from the USD 6.94bn in 4Q FY2018-2019. Many Egyptians are employed in Gulf Arab states, where oil revenues have declined.
  • Suez Canal revenues fell slightly to USD 1.34bn from USD 1.46bn in 4Q FY2018-2019, as the pandemic took its toll on global trade.
  • The capital account wasn’t spared either: Net foreign direct investment (FDI) fell to USD 1.52bn from USD 1.71bn during the quarter, after being on the uptick in the first half of the year, increasing by nearly 20% to USD 5bn. Net portfolio investment tanked almost 80% to USD 636.8mn from USD 3.18bn the year before as investors scurried to pull their money out of emerging markets.

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