Egypt’s current account deficit narrowed to USD 13.2 bn in the first nine months of FY 2024-25, down from USD 17.1 bn recorded in the same period a year earlier, according to central bank figures (pdf). Most of the improvement came in 3Q, when the current account deficit narrowed 69.3% y-o-y on the back of surging remittances, higher tourism revenues, and a jump in non-oil exports.

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BoP turns to the red: The overall balance of payments recorded a USD 1.9 bn deficit during the nine-month period, compared with a USD 4.1 bn surplus a year earlier. The shift “was mainly attributed to the decline in the net inflows of the capital and financial account, recording USD 7.7 bn compared to unprecedented inflows of USD 20 bn in the corresponding period, which included Ras El Hekma deal.”

DRIVING THE IMPROVEMENT-

#1- Remittances soared: Remittances from Egyptians abroad jumped 82.7% y-o-y to USD 26.4 bn during the nine-month period, up from USD 14.5 bn a year earlier.

#2- Tourism revenues continued to climb, rising 15.4% y-o-y to USD 12.5 bn, supported by a pickup in tourist nights to 134.3 mn from 116.4 mn.

#3- Investment income deficit eased: The investment income deficit narrowed 13.4% y-o-y to USD 12.2 bn, as investment income payments fell 6.9% to USD 14.1 bn and receipts jumped 74.0% to USD 1.9 bn.

DRAGGING THE BALANCE-

#1- Non-oil trade deficit widened to USD 28 bn, up from USD 23.7 bn in 9M FY 2023-2024, due to increased spending on wheat, soybeans, spare parts for cars and tractors, maize, and raw tobacco. Imports jumped to USD 53.6 bn and the rise in exports wasn’t not enough to help offset the increase.Non-oil exports rose 31.3% y-o-y to USD 25.6 bn, up from USD 19.5 bn, driven by a jump in gold, clothing, fruit, cables, and aluminum exports.

#2- Oil trade deficit doubled: The oil trade deficit expanded to USD 10.3 bn from USD 5.1 bn a year earlier, as oil imports rose to USD 14.5 bn on the back of higher gas, oil products, and crude imports. Meanwhile, oil exports inched down to USD 4.2 bn from USD 4.6 bn due to falling crude and gas shipments, partially offset by a rise in product exports.

#3- Suez Canal revenues plummeted: Suez Canal receipts fell 54.1% y-o-y to USD 2.6 bn during the first nine months of the last fiscal year, with net tonnage down 61.9% and vessel transits falling 44.8% amid continued Red Sea disruptions.

#4- FDI inflows cooled off: Net FDI into Egypt fell to USD 9.8 bn from USD 23.7 bn, when inflows were inflated by the Ras El Hekma agreement. Non-oil FDI inflows came in at USD 9.1 bn, while oil FDI recorded a net inflow of USD 669.6 mn after a net outflow a year earlier.

#5- Portfolio inflows dropped: Portfolio investment in Egypt registered a net inflow of USD 2.1 bn during the period, down from USD 14.6 bn in 9M 23-24.

#6- Debt repayments weighed on the balance: Egypt recorded a net repayment of USD 2.6 bn on medium- and long-term loans during the period between July 2024 and March 2025, compared to USD 1.9 bn a year earlier.

REMEMBER- Egypt’s current account deficit widened to USD 11.1 bn in 1H FY 2024-2025, driven by a rise in the trade deficit and a drop in Suez Canal revenues. The BoP was also in deficit during that period, recording USD 502.6 mn.

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