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

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.

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.

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.

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.

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.