Egypt’s current account deficit mushroomed in the April-June quarter to $3.83 billion from $1.09 billion a year earlier, according to calculations by Reuters based on central bank figures released on Monday.
Tourism revenue plummeted to $305 million during the quarter from $3.18 billion in April-June 2019, as the coronavirus wreaked havoc on the economy. Egypt stopped most international airline flights in mid-March as the pandemic gripped the world, before gradually reopening them in June.
Exports dropped to $5.42 billion from $7.58 billion while imports fell to $13.83 billion from $15.87 billion, causing the trade deficit to widen to $8.41 billion from $8.29 billion.
Suez Canal revenue, hurt by a fall in world trade since the pandemic, dipped to $1.34 billion from $1.46 billion, while remittances from Egyptians working abroad fell to $6.21 billion from $6.94 billion. Many Egyptians are employed in Gulf Arab states, where oil revenues have declined.
Net foreign direct investment (FDI) dropped to $1.52 billion from $1.71 billion, while net portfolio investment plunged to $636.8 million from $3.18 billion as investors pulled money out of emerging markets.
“The current account deficit widened less than we had anticipated, as the non-oil trade deficit declined and the country recorded an oil trade surplus,” Allen Sandeep of Naeem Brokerage said.
Reuters calculated the quarterly figures by subtracting the first three quarters of the financial year from the full year, which ends in June.
The current account deficit for the entire financial year to June 2020 increased to $11.2 billion, from $10.9 billion in 2018-19.
“The Egyptian economy was able to contain the impact of the global financial shock triggered by the crisis,” the central bank said in a statement accompanying the full year results.
The economy had been boosted in the last three years by an upswing in tourism, strong remittances from Egyptian workers abroad and recently discovered natural gas fields coming on stream.
The International Monetary Fund said earlier this month that Egypt’s economy had performed better than expected despite the pandemic.