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Our issue today packs the latest on our trade balance and remittance inflow levels in the past fiscal year, and includes some important company updates from EGTS, Taqa Arabia, and more.
But before we start, Asharq Business reported that the International Monetary Fund has once again delayed its fourth review of Egypt’s USD eight billion loan program. The fourth review — which, if approved, would unlock the program’s largest tranche yet (USD 1.3 billion) — has now been reportedly pushed back a month to November.
Egypt’s trade deficit widens to almost USD 40 billion in FY 2023-24
Egypt’s trade balance deficit — which measures the goods and services we import vs the ones we export — rose by USD 8.4 billion, 26.9% YoY, in the past fiscal year to USD 39.6 billion.
This comes on the back of a significant fall in oil exports (which declined 29.6% YoY to USD 5.7 billion), according to data from the Central Bank. |
Current account balance:
The Canal — which contributed about 2% of the country’s GDP prior to Red Sea disruptions — saw its revenues fall 24.3% YoY during the past FY to USD 6.6 billion.
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Remittances fall 0.6% in past fiscal year
According to Central Bank Data, remittances flowing into the economy from Egyptian expats reached some USD 21.9 billion in FY 2023-24, representing an 0.6% YoY decline from levels recorded the year before. |
Refresher:
Remittance inflows significantly decreased in 2023, seeing a 30.8% YoY dip to USD 22.1 billion as Egyptians residing abroad held onto their money or transferred it back using unofficial channels. The fall in volumes came on the back of the country’s acute FX liquidity crunch at the time. On a Q4 basis:
The CBE noted that during the fourth quarter of the fiscal year remittances of Egyptians abroad rose 61.4% YoY to reach USD 7.5 billion.
Going forward:
Fitch projected in its latest country report for Egypt that inbound remittance inflows will rise 31% YoY this fiscal year to USD 28.9 billion (c. 9.1% of GDP.)
Why this matters:
One of Egypt’s main sources of foreign exchange, the government expects remittances to increase by 10% annually to ultimately reach USD 53 billion by 2030. |
Egyptian Resorts Co (EGTS) saw its losses grow nearly ninefold during the first six months of the year, reporting a 790% YoY rise to EGP 749.1 million compared to losses of 84.2 million recorded during the same period the year before. |
Topline:
Meanwhile, the company’s revenues rose 406.4 YoY during the six months ending in June to EGP 315.5 million.
Remember, the company may have a way to offset some of its losses:
Industry sources told Al Mal in July that the company now has three options to develop an area spanning 3.1 million square meters in Sahl Hasheesh following a recent court ruling in its favor. |
What else is clapping?
- Taqa Arabia is planning to pour in investments of up to USD 30 billion to build two solar power plants in Egypt next year, the company said earlier this week. This is the latest in the company’s decarbonization efforts, coming after it said in August it will join forces with France’s Voltalia to build a USD 3.5 billion green ammonia project in Ain Sokhna as part of an agreement with the Sovereign Fund of Egypt.
- Orascom has kicked off construction on its “Toban” project in El Gouna. The first phase of the project— which will span one million square meters — will include residential units, a commercial center, a hotel and yacht marinas, and is expected to be completed by Q1 2027.
- EFG Holding wants its operations in Saudi Arabia to comprise 20% of its revenues in the next five years, the group’s CEO Karim Awad said in an interview with Asharq. Awad recently told Al Borsa his company is looking to establish a regional HQ in the Kingdom as part of its planned GCC expansion.
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