Egyptian expats' remittances increased in FY 2019/2020, which ended in June, by 10.4 percent, reaching a record $27.8 billion, up from $25.2 billion in FY 2018/2019, the Central Bank of Egypt (CBE) announced on Wednesday.
The CBE noted remittances rose in June by 33.7 percent, recording $2.6 billion, up from $1.9 billion in June 2019.
Remittances declined in April and June by 10.5 percent, registering $6.2 billion, down from $6.9 billion during the same months in 2019, according to the CBE.
In April and June, Egypt was witnessing the dual shock of the COVID-19 outbreak and a collapse in global oil prices.
In March, the CBE said remittances recorded $26.8 billion in 2019, increasing by five percent year-on-year.
However, the same month saw a sharp decline in National Insurance-Policy Repositories (NIRs) to reach $40.1 billion as of the end of March 2020, down from $45.5 billion at the end of February 2020, driven by the repercussions of the dual shock.
Egypt’s NIRs started to bounce back by the end of June, to reach $38.2 billion, up from $36 billion in May, according to the CBE’s announced figures.
In its latest economic outlook in October on the Middle East and North Africa (MENA), the World Bank said the dual shock is expected to lower oil prices, which will hurt both MENA exporters indirectly, and importers directly, from reduced foreign direct investment, remittances, tourism, and official assistance to exporters.
Remittances from Gulf Cooperation Council (GCC) countries have been substantial in many MENA countries. In addition, official development assistance (ODA) from the GCC is critical for many developing MENA countries, according to the report.
Yet, the World Bank report warned that lower oil prices could threaten the sustainability of remittances, investment, and aid flows from the GCC, expecting remittances headed to the region to drop by 20 percent in 2020.
On the other hand, global oil prices are expected to stand at $41 bpd until the end of 2020 and to jump to $46 bpd in 2021, economist and Director of the Research Department at the International Monetary Fund (IMF) Gita Gopinat told Ahram Online in an earlier interview.
According to the International Monetary Fund's updated report on the Middle East and Central Asia, released in October, oil prices declined by 60 percent between February and April 2020 as the pandemic led to a collapse in global oil demand and concerns about storage capacity.