The Central Bank said that there are several factors that limited the rise in the current account deficit during the last fiscal year, foremost of which is:
1- Remittances of Egyptians abroad:-
The Central Bank revealed that the remittances of Egyptians abroad rose 13.2 percent to record about $31.4 billion during the last fiscal year, compared to $27.8 billion in the previous fiscal year.
2- Petroleum balance:-
The Central Bank stated that the improvement of the oil balance deficit to be limited to only $7.6 million, compared to a deficit of $421 million, which limited the widening of the current account deficit, and stated that this improvement in the deficit is a result of the following:
1- Petroleum exports rose to $8.6 billion, an increase of $117.3 million
2- Petroleum imports decreased by $297 million to record $8.6 billion.
High current account deficit
The Central Bank stated that the current account deficit increased during the last fiscal year as a main outcome of the decline in the service balance surplus by 42.9%, to be limited to 5.1 billion dollars, compared to 9 billion dollars in the previous fiscal year, as a result of
1- Tourism revenues fell 50% to reach $4.9 billion, compared to $9.9 billion
2- Transportation receipts decreased by 4.5% to $7.5 billion, compared to $7.9 billion, as a result of the decline in airline company receipts, as well as port services receipts affected by the Corona pandemic.
3- The non-oil trade deficit increased by 16.7% to reach $42.1 billion compared to $36 billion, driven by an increase in non-oil imports by $8.2 billion to reach $62.1 billion, as a result of an increase in the imports of intermediate goods $3.3 billion, raw materials $736.3 million, and investment goods 529.3 million These inputs contribute to improving the growth rate of the Egyptian economy.
The rise in imports came at a time when exports increased by 2.2 billion dollars only to record 20.1 billion dollars, and most of the increase came in electrical appliances for home use, inorganic compounds, wires and cables.
4- The increase in the investment balance deficit by 9.2% to reach $12.4 billion, compared to $11.4 billion, contributed to the widening of the current account deficit, and its increase came as a result of:
A- Increasing investment payments by 676 million dollars to reach 13 billion dollars, reflecting the profits achieved on foreign direct investment, interests and distributions on foreign investments in Egyptian bonds and securities.
B- Investment income proceeds decreased by 396.2 million dollars to be limited to 572.9 million dollars due to a decrease in interest on deposits abroad.
What are the factors that limited the rise in Egypt’s current account deficit last fiscal year? It was written in Al Borsa newspaper.