{"id":548379,"date":"2022-08-07T04:00:45","date_gmt":"2022-08-07T04:00:45","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2022\/08\/07\/outflows-commodity-price-shock-hit-current-account-in-3q-2021-2022\/"},"modified":"2022-08-07T04:00:45","modified_gmt":"2022-08-07T04:00:45","slug":"outflows-commodity-price-shock-hit-current-account-in-3q-2021-2022","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2022\/08\/07\/outflows-commodity-price-shock-hit-current-account-in-3q-2021-2022\/","title":{"rendered":"Outflows, commodity price shock hit current account in 3Q 2021-2022"},"content":{"rendered":"

<\/a> Egypt\u2019s current account deficit widened more than 2% to USD 5.79<\/strong> bn in 3Q <\/strong>2021-2022<\/strong>, as capital outflows and surging commodity prices put pressure on the country\u2019s external position, according to central bank figures (pdf)<\/a> released Thursday showed. An exodus of foreign investors fuelled by the war in Ukraine and rising interest rates resulted in a net USD 14.75 bn exiting the country between January and March, reversing inflows of USD 5.82 bn a year earlier, the data showed. \u201cThis reflected investors\u2019 concerns over the Russian-Ukraine conflict that could escalate into World War III, as well as the contractionary monetary policies adopted by the Federal Reserve, leading to outflows of hot money from emerging markets,\u201d the central bank said.<\/p>\n

The commodity price shock dealt a blow:<\/strong> Egypt\u2019s non-oil trade deficit widened to USD 13.90 bn from USD 11.60 bn in 3Q 2020-2021 after a combination of surging food and energy prices triggered by the war and covid-fuelled inflation caused a 21% rise in its non-oil import bill, the central bank said. This led to the overall trade deficit widening to USD 11.83 bn from USD 11.37 bn a year earlier.<\/p>\n

A lot can change in three months:<\/strong> The deficit jumped more than 52% from USD 3.80 bn in the previous quarter<\/a>.<\/p>\n

The bright spots: Rising exports + FDI limited the damage.<\/strong> Rising commodity prices benefited the country\u2019s oil and gas sector in the third quarter, which saw exports more than double to USD 5.15 bn from a year earlier. Meanwhile, non-oil exports rose 25% to USD 6.63 bn, from USD 5.31 bn. Net foreign direct investment was significantly up in the three months ending March 2022<\/strong>, reaching USD 4.08 bn from USD 1.43 bn a year earlier, and from USD 1.6 bn in 2Q 2021-2022.<\/p>\n

Also from the release:<\/strong><\/p>\n