07 Aug 2022

The CBE (Central Bank of Egypt) released the balance of payment figures for 3Q21/22. The numbers show the current account deficit widening marginally to USD5.8bn from USD5.7bn in 3Q20/21. The key driver of this increase is the Russia-Ukraine conflict which, among other things, resulted in massive portfolio outflows. Another consequence of the conflict was a small increase in the trade deficit caused by rising commodity prices, with the deficit increasing from USD11.4bn in 3Q20/21 to USD11.8bn in 3Q21/22.

Countering this was a steep increase in net FDI (foreign direct investment), which shot up from USD1.43bn in 3Q20/21 to USD4.08bn in 3Q21/22. Also, tourism rebounded considerably, with tourism receipts rising to USD2.38bn from USD1.32bn in 3Q20/21. Remittances from Egyptians abroad also increased to USD8.05bn from USD7.85bn in 3Q20/21. On top of that, Suez Canal revenues rose as well, from USD1.45bn in 3Q20/21 to USD1.71bn.

As for 9M21/22, the overall balance of payments recorded a deficit of USD7.3bn versus USD1.8bn in 9M20/21. The current account deficit increased marginally in the same period, rising to USD13.6bn from USD13.3bn in 9M20/21. The trade deficit was highly affected by rising commodities prices, rising 23% YoY in 9M21/22 to reach USD37.7bn. On the other hand, the oil trade surplus rose dramatically to reach USD4.1bn versus only USD175mn in 9M20/21, mainly

due to a large increase in natural gas exports. The services surplus also increased significantly to reach USD7.9bn compared to USD3.1bn in 9M20/21 due to increases in revenue from tourism and the Suez Canal. On the other hand, the capital & financial account saw net inflows decrease from USD17.1bn in 9M20/21 to USD10.8bn in 9M21/22.

Despite all that, net international reserves remained almost stable, down to USD33.1bn in July 2022 from USD33.4bn in June 2022. (Sources: Reuters (English), Zawya (English) (Arabic), al-Ahram (English), Daily News Egypt (English), Egypt Today (English), Sada el-Balad (English), al-Arabiya (English), al-Maal, Mubasher, Amwal al-Ghad, al-Borsa, al-Masry al-Youm, al-Shurouk, Akhbar al-Youm, Masrawy, al-Sharq Business, CNBC Arabia, RT)