Egyptian expat remittances witnessed an increase of 13 percent in the first 10 months (July-May) of FY2020/2021, compared to the same period of FY2019/20, to reach $28.5 billion, growing by $3.3 billion, the Central Bank of Egypt (CBE) announced on Tuesday.

Expat remittances jumped in May to $2.6 billion, up from $1.8 billion in the same month of 2020, increasing by an annual rate of 45.2 percent, according to the CBE.

Egyptian expat remittances are a key source of hard currency for the country, besides the Suez Canal, exports and the tourism sector revenues.

The estimations of remittances in FY2020/21 exceed the expectations in the economic and social development plan for the FY2021/22, approved by the House of Representatives, which expected them to reach $30 billion, up from $25.2 billion in FY2018/19, $27.8 billion in FY2019/20, and FY $28 billion in FY2020/21.

In May, the World Bank (WB) revisited its forecasts for remittances to low- and middle-income countries for 2021, projecting their flows to grow by 2.6 percent in 2021 to record $553 billion.

For the Middle East and North Africa (MENA) region, the WB expected remittance inflows to expand by 2.6 percent as well.

During August, Fitch Ratings expected Egyptian banks’ foreign currency liquidity in 2021/22 to be supported by Egypt’s expected stable current account deficit (3.2 percent in FY2021/22), higher foreign-currency reserves ($40.6 billion at the end of May 2021 from $36 billion at the end of May in 2020), and a gradual pick-up in tourism.

In its recent forecasts on Egypt’s economic outlook, the International Monetary Fund (IMF) projected Egypt’s GDP to grow by 5.2 percent in FY2021/22 – up from 2.8 percent in FY2020/21 – before rebounding slightly in FY2022/23 to reach 5.6 percent, which is the same percentage recorded in FY2019/20 prior to the outbreak of the pandemic.

Egypt targets a 5.4 percent real GDP growth in the current FY2021/22 in light of the incremental recovery of its economy from the COVID-19 pandemic and its impact.

Trading Economics expects Egyptian expat remittances to hit $73 billion in 2022 and up to $75 billion in 2023.