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CBE: Account deficit drops 45%, trade deficit drops 7.6%

Foreign Direct Investment in Egypt dropped by 25%, reaching $3 billion, according to a press release published by the Central Bank of Egypt (CBE).
<p>In a statement dealing with the Balance of Payment (BOP) Performance in Fiscal Year (FY) 2012/2013, the CBE announced that Egypt’s current account deficit decreased by 45% to reach $5.6 billion, compared to $10.1 billion a year earlier. An overall BOP surplus of $237 million was witnessed in Egypt’s transactions with the external world.</p><br><img src="" align="right" hspace="10"/>
<p>The changes in the account deficit were attributed to the declining trade deficit, which reached $31.5 billion after dropping $2.6 billion. Additionally, tourism revenues increased by 3.5%, Suez Canal receipts decreased by 3.4%, transportation receipts rose by 7% and investment income payments declined by 11.6%. The final contributor to the account deficit changes were unrequited transfers, which reached $19.3 billion as a result of a rise in private transfers of workers’ remittances.</p><br>
<p>Since the BOP is not only determined by the current account, the CBE looked into the country’s capital and financial account. It showed an increase of 870% in net inflows, reaching $9.7 billion, compared to $1 billion last year. This remarkable jump occurred mainly due to the issuance of Egyptian government bonds worth $2.5 billion.</p><br>
<p>Liabilities of the CBE to other countries increased to $6.5 billion (from $1.2 billion), due to the pickup in the deposits transferred from Arab countries. Talks have been circling around aid packages from Qatar and Kuwait in the past weeks. </p><br>
<p>Lastly, the CBE highlighted that inflows of Foreign Direct Investment retreated by $1 billion to reach $3 billion. Last year, inflows were set at $4 billion.</p><br>