Egypt’s current account deficit widened to US$8.38 billion from July 2014 to March 2015, the Central Bank of Egypt reported Sunday.
At the same time last year, the current account deficit—which measures the difference in the value of goods, services and cash transfers flowing out of an into the country—stood at $543.1 million.
Overall, the balance of payments deficit reached $1.0 billion, compared to a surplus of $2.2 billion at the same time last year.
The deficit was driven by Egypt’s lopsided balance of trade, which increased by almost 23 percent to stand at $29.6 billion, compared to $24.1 billion the year before.
Exports fell by 13.8 percent to reach $16.9 billion, while imports increased 6.3 percent to reach $46.4 billion. The Central Bank attributes the drop in exports to a drop in both the quantity and value of Egypt’s oil exports, and to an increase in non-oil imports.
Meanwhile, net unrequited transfers—which includes both foreign aid and worker remittances—dropped to $16.9 billion, compared to $23.1 billion in the same period the year before. The decline came on the back of a drop in official cash and commodity transfers, which fell to $2.6 billion compared to $10 billion the previous fiscal year.
According to Ministry of Finance calculations, if exceptional financing from Gulf Countries was excluded, the overall balance of payment performance would have improved by 61 percent year-on-year, to reach a deficit of US$3.4 billion compared to US$8.7 billion in July to March of the 2013/14 fiscal year.
In April, Egypt received US$6 billion in Central Bank deposits from its allies in the Gulf, but the funds arrived too late to be included in the July-March report.
On the upside, the service and income balance ran a surplus of US$4.2 billion, well above the US$418.2 million recorded last year. According to the CBE, tourism revenues were key to this change, rising from US$3.4 billion last year to US$5.5 billion.
With foreign direct investment inflows rising to US$5.7 billion compared to US$3.1 billion the year before, the capital and financial account also registered a higher net inflow, reaching US$7.0 billion compared to US$2.9 billion.