{"id":549947,"date":"2022-10-09T04:08:14","date_gmt":"2022-10-09T04:08:14","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2022\/10\/09\/current-account-narrows-in-fy-2021-2022-despite-turbulence\/"},"modified":"2022-10-09T04:08:14","modified_gmt":"2022-10-09T04:08:14","slug":"current-account-narrows-in-fy-2021-2022-despite-turbulence","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2022\/10\/09\/current-account-narrows-in-fy-2021-2022-despite-turbulence\/","title":{"rendered":"Current account narrows in FY 2021-2022 despite turbulence"},"content":{"rendered":"

<\/a> Egypt\u2019s current account deficit narrowed by 10.2% to USD 16.6 bn in FY<\/strong> 2021-2022<\/strong>, buoyed by oil and non-oil exports, rising tourism receipts, and a jump in FDI, according to central bank figures (pdf)<\/a> released Thursday. \u201cThese developments came despite the decline in global economic activity triggered by the Russian-Ukrainian crisis, which has driven up energy and commodity prices significantly,\u201d leading to a monetary tightening wave to put a cap on inflation, the central bank said.<\/p>\n

The brightest spot: Tourism receipts more than <\/strong>doubled <\/strong>y-o-y<\/strong> to USD 10.7 bn as tourist arrivals gained momentum after a slump triggered by the war in Ukraine, which had a significant impact on tourism from Russia and Ukraine \u2014 two of our key tourism markets. Tourist arrivals increased more than 85% y-o-y in 1H 2022<\/a> to reach 4.9 mn visitors. Egypt has been working overtime<\/a> to attract visitors from other European markets to drive inbound traffic, with efforts also including luring tourists from little-tapped markets in Latin America and other markets, including the Gulf.<\/p>\n

FDI also picked up steam during the year: <\/strong>Net foreign direct investment rose 71.4% y-o-y to USD 8.9 bn during the fiscal year that ended in June. Net FDI in the non-oil sector recorded USD 11.6 bn, the majority of which came in during 2H 2021-2022 (which is when our Gulf neighbors went on a spending spree<\/a> in Egypt). Greenfield investments and capital increases from existing companies accounted for USD 3.4 bn of non-oil FDI, according to the balance of payments.<\/p>\n

Rising natgas prices + bigger export volumes moved our oil trade to the positives: <\/strong>Egypt\u2019s oil trade balance recorded a USD 4.4 bn surplus for the year, from a deficit of USD 6.7 mn during FY 2020-2021, thanks to the global hike in natural gas prices and our entry to new markets including Turkey, Italy, France and Greece.<\/p>\n

Also contributing to the narrowing current account deficit:<\/strong><\/p>\n