Egypt’s FDI records $13.3B in FY 2016/17: CBE

CAIRO – 12 September 2017: Egypt’s net foreign direct investments (FDI) have increased to $13.3 billion in the last fiscal year (FY) 2016/2017, compared to $12.5 billion in the previous fiscal year, with a 6.5 percent increase, the Central Bank of Egypt (CBE) said.

In its annual bulletin for FY 2016/2017, the CBE said that Egypt’s balance of payments (BOP) achieved a surplus of $13.7 billion, of which about $12.2 billion were collected in the period immediately following the CBE’s decision to liberate the Egyptian pound exchange rate (in line with a total deficit of $2.8 billion) in FY 2016/2017.

This is due to the capital and financial account, which recorded a net inflow of $29 billion (against $21.2 billion) and the current account deficit narrowed to $15.6 billion (from $19.8 billion).

The surplus of BOP was mainly an outcome of the following developments:
The net unrequited current transfers increased to $17.5 billion in FY 2016/2017 (from $16.8 billion), as a result of the hike of net private transfers recording $17.3 billion (against $16.7 billion), due to the increase in workers' remittances reaching $17.5 billion.

According to the CBE, foreign investments in Egyptian treasury bills continued their climb, recording net purchases of $10 billion.

The report pointed out that Egypt witnessed an increase in the proceeds of commodity exports by 15.9 percent, recording about $21.7 billion in FY 2016/2017 compared to $18.7 billion in FY 2015/2016. This increase came as a result of the high competitive advantage of Egyptian export prices following the flotation of the Egyptian pound, as well as the rise in petroleum exports by 15.4 percent.

Tourism revenues also jumped 128.3 percent and 201.5 percent from January 2017 until March and from April to June, respectively, according to the CBE.

Foreign reserves in the CBE have been rising since the Egyptian government clinched a $12 billion three-year loan from the International Monetary Fund (IMF) in November, after Cairo started implementing an ambitious economic reform plan by floating the Egyptian pound, introducing a value added tax and slashing energy subsidies.