Egypt's current account deficit more than doubles to $5.9 billion in Q1 2024-2025

The latest data released by the Central Bank of Egypt reveals that in the first quarter of the 2024-2025 fiscal year (July to September 2024), Egypt's current account deficit significantly increased to $5.9 billion, more than doubling from $2.8 billion in the same period of the previous fiscal year. Egypt's economic transactions with the external world resulted in an overall balance of payments deficit of $991.2 million, compared to a surplus of $228.8 million in the same period last year.

The Central Bank of Egypt attributed the surge in the current account deficit to multiple factors, including the widening of the non-oil trade deficit. The non-oil trade deficit reached $9.8 billion in July-September 2024, compared to $6.6 billion in the same period last year. The oil trade deficit also expanded from $1.3 billion to $4.2 billion. Oil imports increased by $2.5 billion, reaching $5.4 billion, mainly due to a $1.5 billion and $1.2 billion increase in imports of petroleum products and natural gas, respectively. Meanwhile, crude oil imports decreased by $191.9 million. On the other hand, oil exports decreased by $415.8 million to only $1.2 billion, although exports of petroleum products increased by $135 million.

Another factor contributing to the surge in Egypt's current account deficit is the significant decline in Suez Canal transit fee revenues. In the first quarter, Suez Canal transit fee revenues fell by 61.2% to $931.2 million, compared to $2.4 billion in the same period last year. Net tonnage decreased by 68.4% to only 127.2 million tons, and the number of transiting ships decreased by 51%. The ongoing tensions in the Red Sea region continue to affect maritime navigation through the Suez Canal, forcing several shipping companies to change their routes.

Despite the sharp decline in Suez Canal revenues, some factors mitigated the rise in Egypt's current account deficit. Remittances from Egyptian workers abroad increased by 84.4% in the first quarter, reaching $8.3 billion, compared to $4.5 billion in the same period last year. Tourism revenues also increased by 8.2% to $4.8 billion, thanks to an increase in tourist overnight stays to 51.6 million nights. On the other hand, payments made abroad through electronic cards decreased by 59.7% to $406.7 million.

Meanwhile, the investment income deficit decreased by 7.2% to $4.3 billion, due to a 60% increase in investment income to $660.6 million, and a slight 1.6% decrease in investment income payments to $4.9 billion. The Central Bank of Egypt also revealed that the capital and financial account recorded a net inflow of $3.8 billion, compared to $1.8 billion in the same period last year. Egypt's net foreign direct investment inflow increased from $2.3 billion last year to $2.7 billion. In addition, Egypt's net portfolio outflow decreased to $384.7 million, compared to $523.4 million in the same period last year.

At the same time, banks' foreign assets recorded a net inflow of $2.1 billion, compared to a net outflow of $731 million in the same period last year. The news reports on our website are for informational purposes only. Content related to finance, investment, tax, or law should not be considered financial advice or recommendations. Please refer to our full disclaimer policy here.