CBE: BOP surplus hit $ 227.3M in Q1 of FY 2019/2020

CAIRO - 26 September 2019: The balance of payments (BOP) recorded an overall surplus of $ 227.3 million in the first quarter of FY 2019/2020, according to the Central Bank of Egypt (CBE).

The current account deficit narrowed by $ 629.8 million to $ 1.4 billion (compared to $ 2.0 billion), mainly due to the decline in the non-oil trade deficit and the increase in current transfers, a statement issued by the bank read.

The non-oil trade balance deficit declined by $ 1.0 billion to $ 8.2 billion (compared to $ 9.2 billion), as a result of the increase in non-oil merchandise exports by $ 707.3 million to $ 4.7 billion (compared to $ 4.0 billion), due to the higher exports of gold, radio and TV transmitters and receivers, drugs, vaccines, pharmaceuticals, and organic and inorganic compounds.

The CBE report, also attributed the drop of the non-oil deficit to the decline in non-oil merchandise imports by $ 322.7 million to $ 12.9 billion (compared to $ 13.2 billion), largely driven by the drop in imports of cast iron, wheat, wood in the rough and intensified wood, and spare parts of cars and tractors.

Unrequited current transfers rose by $ 785.1 million to $ 6.7 billion (compared to $ 5.9 billion), mainly due to higher remittances by expats.

The oil trade deficit stabilized at $ 606.2 million, as a result of the decline in oil exports by $ 371.7 million to $ 2.4 billion (compared to US$ 2.8 billion), due to the drop in the exports of crude oil and oil products, despite the increase in the exports of natural gas.

The decrease in oil imports by $ 371.1 million to $ 3.0 billion (compared to $ 3.4 billion), due to the contraction in the quantities imported of oil products and despite the rise in crude oil imports, while natural gas imports stopped starting Q2 of FY 2018/2019.

The services surplus declined by $ 248.1 million to $ 4.0 billion (compared to US$ 4.3 billion), as a result of the stabilization of Net travel balance at $ 3.2 billion as travel receipts rose by $ 262.7 million to $ 4.2 billion (compared to $ 3.9 billion), while travel payments rose by $ 238.2 million to $ 1.0 billion (compared to $ 717.0 million).

Meanwhile, Suez Canal's receipts rose by $ 66.1 million to $ 1.5 billion (compared to $ 1.4 billion).

Government and other services' deficit rose by $ 218.3 million to $ 943.4 million (compared to $ 725.1 million), the report noted.

Investment income deficit widened by $ 936.6 million to $ 3.3billion (compared to $ 2.4 billion), driven largely by the rise in investment income payments by $ 1.0 billion to $ 3.6 billion (compared to $ 2.6 billion).

The capital and financial account recorded a net inflow of $ 657.9 million (compared to $ 1.8 billion).

Net outflows of portfolio investment in Egypt recorded $ 2.0 billion (compared to $ 3.2 billion). This was mainly due to the volatility observed in global financial markets and especially emerging markets during that time.

Net inflows of foreign direct investments (FDI) in Egypt increased by $ 937.2 million to $ 2.4 billion (compared to $ 1.4 billion) as total inflows rose by $ 1.1 billion to $ 4.3 billion (compared to $ 3.2 billion), while total outflows rose by $ 107.3 million to $ 1.9 billion (compared to $ 1.8 billion).

The rise in the net inflows of FDI was largely driven by the increase in net inflows for greenfield investments by $ 837.9 million to $ 1.5 billion, in addition to the rise in net inflows for oil sector investments by $ 256.4 million to $ 744.2 million.

Net disbursements of medium- and long-term loans and facilities increased by $ 2.3 billion to $ 2.1 billion (compared to net repayments of US$ 197.5 million).