Egypt's balance of payment records surplus of $410.9M in H1 of 2019/20

CAIRO – 30 March 2020: Egypt’s balance of Payment (BOP) recorded a surplus of $410.9 million in the first half of fiscal year 2019/2020, compared to a deficit of $1.8 billion in the same period a year earlier, according to the Central Bank of Egypt (CBE).

CBE clarified Monday that the current account deficit retreated by $ 684.4 million or 13 percent, to register $4.6 billion, compared to $5.3 billion, driven mainly by the decline in non-oil trade deficit, and the rise in unrequited current transfers.

“However, the reversal of the oil trade balance from a surplus to a deficit; the fall in the services surplus, and the rise in investment income deficit have limited the improvement seen in the current account deficit,” it added.

According to the statement, non-oil trade deficit fell by $1.4 billion to $18 billion, from $19.4 billion in a prior year.

It clarified that non-oil exports rose $940.9 million, to $9.2 billion, compared to $8.3 billion in the same period of 2018/2019. “Exports that registered increases were mainly gold; radio and TV transmitters and receivers; drugs, vaccines, serums and pharmaceuticals; and organic and inorganic compounds.”

As per non-oil imports, they retreated by $490.7 million to $27.2 billion, from $27.7 billion, principally imports of cast iron; wheat; spare parts and accessories of cars and tractors; and drugs.

“Unrequited current transfers moved up by $1.7 billion to $13.6 billion (from $12.0 billion) supported primarily by the 13.5 percentrise in workers’ remittances,” it added.

Regarding Oil trade, CBE stated that oil trade balance ran a deficit of $ 733.3 million, compared to a surplus of $150.8 million) on the back of the decline in oil exports by $1 billion to $5 billion, from $6 billion, due to the drop in the exports of crude oil and oil products, despite the increase in the exports of natural gas.

It added that the marginal decrease in oil imports by $79.7 million to $5.78 billion, from $5.86 billion), due to lower imports of oil products (as importation of natural gas has stopped starting from Q2 of FY 2018/2019) and higher imports of crude oil.

The statement noted that services surplus declined by $1 billion to $ 6.3 billion, from $7.3 billion.

CBE attributed this decline to the retreat of travel surplus by $155.4 million to $5.3 billion, from $5.4 billion, due to the increase in both travel receipts (tourism revenues) by $459.7 million to $ 7.2 billion, and travel payments by $615.1 million to $2 billion. It also added that Suez Canal receipts rose by $103.8 million to $3 billion, from $ 2.9 billion.

In addition, the bank said that transportation surplus (excl. Suez Canal) narrowed by $399 million to $298.6 million, from $ 697.6 million; and the deficit on government services and other services rose by $ 527.2 million to $2.3 billion, from $1.8 billion.

“Investment income deficit widened by $571.1 million to $5.8 billion, from $ 5.2 billion), mainly on the back of the rise in investment income payments by $604.8 million to $ 6.3 billion, from $5.7 billion,” it said.

Capital and Financial Account

The Central bank said that the capital and financial account recorded a net inflow of $ 5.2 billion, compared to $3.1 billion.

It clarified that the inflows were driven by portfolio investment in Egypt, Total inflows of foreign direct investment, and net disbursements of medium- and long-term loans and facilities.

“Portfolio investment in Egypt recorded net inflows of $ 273.6 million (a reversal from the net outflows of $ 5.9 billion), despite the volatility of global financial markets, especially the emerging markets,” it stated.

It added that total inflows of FDI in Egypt moved up by $ 1.2 billion to $ 9.2 billion (from $ 8.0 billion). On the other hand, total outflows increased by $ 378.9 million to $ 4.2 billion (from US$ 3.8 billion).

“This resulted in an increase in net FDI in Egypt by $ 773.8 million, to record a net inflow of $ 5.0 billion (against $ 4.2 billion), largely driven by the increase in net inflows for greenfield investments by $ 1.2 billion to $3.2 billion,” it clarified.

It added that net disbursements of medium- and long-term loans and facilities increased by $ 1.2 billion, to record net disbursements of $ 2.1 billion, compared to $872.3 million.