CBE reports $991.2M BoP deficit as Suez Canal revenues slip, oil and non-oil trade deficit grows

Cairo – January 19. 2025: Egypt’s balance of payments (BoP) recorded a $991.2 million deficit in the first quarter of the 2024/2025 fiscal year, reversing the $228.8 million surplus seen during the same period in the previous fiscal year, according to the Central Bank of Egypt (CBE).

The primary driver of this shift was a sharp expansion in the current account deficit, which rose to $5.9 billion, compared to $2.8 billion in the first quarter of the prior year.

The current account deficit expanded due to a $6.1 billion rise in the trade deficit, alongside a 22.1 percent drop in the services surplus, which fell to $4.1 billion, explained the CBE’s recent report.

A major contributor to the widening current account deficit was the sharp drop in Suez Canal transit revenues, which fell by 61.2 percent to $931.2 million from $2.4 billion in Q1 FY2023/2024. This drop was attributed to a 68.4 percent reduction in net tonnage, with only 127.2 million tons transiting the canal, and a 51 percent decrease in the number of vessels passing through.

The oil trade deficit also broadened significantly, reaching $4.2 billion, compared to $1.3 billion during the same period last year. This was driven by a $2.5 billion increase in oil imports, totaling $5.4 billion, as imports of oil products and natural gas nearly doubled.

On the export side, oil exports dropped by $415.8 million, totaling $1.2 billion, largely due to declines in crude oil and natural gas exports.

The non-oil trade deficit also saw a notable expansion of $3.2 billion, rising to $9.8 billion in Q1 FY 2024/2025, compared to $6.6 billion in the same period the previous year. This was driven by a $4.4 billion increase in non-oil merchandise imports, which reached $17.7 billion, while non-oil exports grew by $1.2 billion, reaching $7.9 billion. Key import categories included wheat, soybeans, pharmaceuticals, and spare parts for electric appliances, while exports were led by fresh and dried fruits, aluminum, and vegetables.

Helping mitigate the impact of these were an increase in remittances, tourism revenues, and FDIs.

Remittances from Egyptians working abroad surged by 84.4 percent, reaching $8.3 billion in Q1 FY 2024/2025, up from $4.5 billion in the same period the previous year.

Tourism revenues also saw an improvement, rising by 8.2 percent to $4.8 billion, compared to $4.5 billion in Q1 FY 2023/2024. This growth was driven by an increase in tourist nights, which totaled 51.6 million, up from 47.7 million during the same period last year.

Foreign Direct Investment (FDI) inflows into Egypt provided further support, with net FDI reaching $2.7 billion in Q1 FY 2024/2025, compared to $2.3 billion during the same period last year. The increase was mainly attributed to non-oil sector investments, which totaled $2.9 billion. This included $304.9 million from the sale of local entities to non-residents, $1.1 billion in greenfield investments, and $359.4 million in real estate investments.

The CBE report also highlighted a 59.7 percent decline in e-card payments abroad, which fell to $406.7 million from $1 billion in the same quarter of the previous year. The investment income deficit narrowed by 7.2 percent, dropping to $4.3 billion, as investment income receipts grew by 60 percent to $660.6 million.