Egypt’s current account position has weakened over 441% y-o-y to USD 9.6 bn in 1H FY2023-24, from USD 1.8 bn recorded the same period last year, according to Enterprise calculations based on central bank figures (pdf).

BoP back in the red: Egypt recorded a BoP deficit of USD 410 mn during the first half of the current fiscal year, in comparison to a surplus of USD 599 mn during the same period in the previous fiscal year. On a quarterly basis, the balance of payments in 2Q FY 2023-24 was back in a deficit after two consecutive quarters of recording a surplus.

DRIVING THE DECLINE-

#1- Exports fall: Exports weakened nearly 24% y-o-y in 1H FY 2023-24 to USD 16.4 bn, driven by a 63% y-o-y dip in oil exports, which recorded USD 3.2 bn for the period. This resulted in the trade deficit widening 21% y-o-y to USD 18.7 bn.

#2- Remittances on the decline: Remittances from Egyptians abroad fell 21% y-o-y to USD 9.4 bn during the period between July and December 2023.

#3- Less FDI: Foreign direct investment came in at USD 5.5 bn during the period, down from USD 5.7 bn during the same period in the previous fiscal year.

SOFTENING THE BLOW-

#1- Tourism revenues saw a 6% y-o-y rise to USD 7.8 bn during 1H, driven by an increase in both tourist nights and arrivals. Egypt received 7.8 mn tourists during the period, up almost 15% y-o-y.

#2- Portfolio inflows jump: Investors reversed course and have once again started pouring capital into Egypt, with the country recording USD 253 mn of net portfolio inflows during the half, in comparison to outflows of USD 3 bn recorded during the same period last year.

#3- Despite the disruptions in the Red Sea, Suez Canal receipts were up 21% y-o-y to USD 4.8 bn.

#4- Imports dip: Imports fell over 5% y-o-y to USD 35.1 bn thanks to a dip in oil and non-oil imports.

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