Egypt's current account deficit drops 77.2% in H1 of FY 2022/23

Muhammad Khalid, Wednesday 3 May 2023

Egypt's current account deficit fell by 77.2 percent to around $1.8 billion during the first half (H1) of the current fiscal year (FY) 2022/23, compared to about $7.8 billion in the corresponding period a year earlier, according to data released by the Central Bank of Egypt (CBE) on Wednesday.

Suez Canal
A file photo of a container vessel in the Suez Canal , Egypt. AFP


The CBE attributed this decline to a 28.4 percent, or a $6.2 billion decrease in the trade balance deficit, which reached around $15.5 billion in H1 of FY 2022/23.

The services balance surplus doubled due to the increase in the receipts from tourism and the Suez Canal transit fees, the CBE said.

Inflows & outflows

Net inflows amounted to around $2.8 billion, while inflows from foreign direct investments recorded about $5.7 billion.

On the other hand, net outflows from the investment portfolio registered approximately $3 billion.

The total surplus in the balance of payment (BoP) reached $599.1 million between July and December 2022.

Meanwhile, the deficit in investment income balance jumped by 25.5 percent( Y-o-Y) to around $8.9 billion in July-December 2022.

The investment income balance is the difference between payments to and from outside Egypt for portfolio investments, direct investments, bank deposits, and external debt.

Trade balance

Non-oil trade balance deficit decreased by around $6.5 billion to $17.3 billion in H1 FY 2022/2023, compared to around $23.8 billion, in the comparative period the year before.

Non-oil merchandise imports shrank 17.3 percent year-on-year (YoY) to around $30.2 billion between July and December 2022.

Meanwhile, non-oil merchandise exports inched up by $124.8 million YoY to about $12.9 billion. The increase was ascribed to many export items, on top of which gold and phosphate/mineral fertilizers.

The oil trade balance achieved a surplus of around $1.8 billion in July-December 2022, down from $2.1 billion the year before.


Tourism revenue surged by 25.7 percent to around $7.3 billion in the first half of FY 2022/2023, compared to $5.8 billion a year earlier.

Egypt received 11.7 million tourists in 2022, up from eight million in 2021, marking a 46.2 percent increase, Minister of Tourism Ahmed Issa stated in March.

Issa said the number of visitors to Egypt is expected to increase by 28 percent to 15 million in 2023.

Egypt has been working to ensure the recovery of the tourism industry, one of the country’s leading economic sectors, after it was hit by the coronavirus pandemic and the Russia-Ukraine war. The Russian and Ukrainian markets are among the largest markets for tourism to Egypt.

Suez Canal

The receipts of the Suez Canal transit fees soared 17.8 percent YoY to around $4 billion in July-December 2022, pushing up Egypt's total transport receipts to $6.8 billion, compared to about $4.7 billion in the same period of the previous fiscal year.

According to figures released by the Suez Canal Authority (SCA), the canal's receipts hit a record $2.3 billion in Q1 of 2023, which represents a 35 percent increase in revenues compared to the same period last year.


CBE's data also showed that remittances from Egyptian expats declined by 23 percent to $12 billion in H1 2022/2023 from around $15.6 billion a year earlier.

It is worth noting that Egyptian expats’ remittance inflows to Egypt grew in FY2021/2022, which ended in June 2022, recording $31.9 billion, a slight increase from $31.4 billion the previous fiscal year.

According to the International Monetary Fund (IMF), Egypt’s total governmental gross debt is expected to rise to 92.9 percent of GDP in 2023, up from 88.5 percent in 2022, before cooling to 87 percent in 2024, the highest among the emerging market and middle-income countries.

Egypt's BoP witnessed an improvement in the first quarter of FY2022/2023 (July-September), as the current account deficit has narrowed by 20.2 percent to post $3.2 billion compared to $4 billion in the same period of the preceding fiscal year.

It is worth noting that the country's net foreign assets (NFAs) deficit increased by EGP 51.456 billion ($1.66 billion) to EGP 755.688 billion ($24.42 billion) in March 2023, compared to EGP 704.232 billion ($22.76 billion) in February.


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