The Clap:
Egypt’s current account deficit has expanded 222.6% YoY during the nine months ending in March 2024 (9M) to a record USD 17.1 billion compared to USD 5.3 billion in the same period prior, the Central Bank of Egypt (CBE) said in a new report.
Driving the drop:
The more than tripling of the deficit was mainly driven by a drop in oil exports, which fell USD 7.2 billion to USD 4.6 billion during the period. Not only have exports seen a sharp decline, but during 9M oil imports saw a USD 1.5 billion jump and natural gas inflows similarly increased by USD 268.2 million.
Maritime disruptions didn’t help either:
Suez Canal revenues fell 7.4% to USD 5.8 billion in the first 9 months of 2023-2024, which further exacerbated the deficit. The CBE notes that the plunge mainly comes on the back of Red Sea maritime disruptions in the wake of regional conflicts that led to a 57.2% percent fall in revenues from January to March to USD 959.3 million.
AND a fall in remittances compounded the problem further:
Although remittances rose for the third consecutive month in May, recording a 73.8% YoY jump to around USD 2.7 billion, they fell 17.1% YoY to USD 14.5 billion during 9M given that the devaluation of the EGP happened only in March.
But there is some positive economic news:
In spite of the ballooning current account deficit, Egypt achieved a total balance of payments (BoP) surplus of USD 4.1 billion in 9M mainly due to a boost in net inflow in the capital and financial account, which reached USD 20 billion compared to USD 8.1 billion in the previous year. The BoP hike is a substantial rise from the USD 281.9 million surplus in the previous fiscal year.
