File Photo: Tourists visit the Karnak Temple Complex in Egypt s southern city of Luxor. AFP
The CBE attributed this contraction to the absence of exceptional inflows seen in the previous fiscal year, most notably the $35 billion Ras El Hekma deal, despite marked improvements in the current account.
Meanwhile, the current account deficit narrowed by 25.9 percent to $15.4 billion, down from $20.8 billion in FY2023/2024. The second half of the current fiscal year (January–June 2025) saw a sharper contraction of 59.9 percent compared to the same period a year earlier, driven by robust external transactions.
Remittances from Egyptians abroad surged by 55.3 percent to a record $36.5 billion, while tourism revenues rose by 16.3 percent to $16.7 billion, supported by a jump in tourist nights to 179.3 million. The services surplus grew by 49.6 percent, and the investment income deficit narrowed by 9.6 percent to $15.8 billion, as income receipts climbed 50.1 percent to $2.9 billion and payments fell 3.7 percent to $18.7 billion.
Non-oil merchandise exports increased by 38.9 percent to $34.6 billion, led by gold, fruits, vegetables, ready-made garments, and aluminium products. However, the non-oil trade deficit widened to $37.1 billion due to a 22 percent rise in imports, which reached $71.7 billion. Key import items included soybeans, wheat, corn, raw tobacco, and auto parts.
The oil trade deficit also expanded sharply to $13.9 billion, up from $7.6 billion, as oil imports rose by $6.1 billion to $19.5 billion—driven by higher volumes of natural gas, oil products, and crude oil. Oil exports declined slightly to $5.6 billion, with drops in crude oil and natural gas partially offset by a $1.1 billion increase in oil product exports.
Suez Canal transit receipts fell by 45.5 percent to $3.6 billion, reflecting a 55.1 percent drop in net tonnage and a 38.5 percent decline in vessel traffic. The second half of the year saw a marginal 1.4 percent decrease in canal revenues compared to the same period in 2024.
On the financial side, the capital and financial account posted net inflows of $10.2 billion, down from $29.9 billion the previous year. Foreign direct investment (FDI) reached $12.2 billion, of which $11.6 billion was directed to non-oil sectors. This included $5.5 billion in capital increases and greenfield investments, $1.9 billion in real estate purchases by non-residents, $399.8 million from sales of local entities, and $4.2 billion in reinvested earnings. FDI in the oil sector rebounded to $598.3 million, reversing a net outflow in the previous year.
Portfolio investment inflows totalled $1.6 billion, while medium and long-term loans registered a net repayment of $3.5 billion due to higher principal repayments of $12.4 billion. Disbursements reached $8.9 billion.
The CBE and commercial banks recorded increased liabilities, resulting in net inflows of $3.6 billion and $3.4 billion, respectively. Net errors and omissions stood at $3.1 billion.
Despite the overall deficit, the data points to a strengthening current account and a more diversified investment landscape, with climate finance, tourism, and remittances playing a growing role in Egypt’s external position.
Egypt has recently designed a new model for its economy through 2030 with a focus on increasing job creation and boosting the country’s economic growth. Egypt’s Narrative for Economic Development is now introduced for a community dialogue that is expected to conclude by the end of November.
The new model centres on five key tradable sectors as a priority; tourism, agriculture, energy, manufacturing, information and communication technology (ICT), with a wider aim to raise the total exports by 20 percent annually and push the real GDP growth to hit seven percent in 2030.
The Egyptian delegation to the annual meetings of the World Bank Group/International Monetary Fund (IMF) is anticipated to showcase the key economic indices Egypt has achieved recently, as well as the new economic narrative during the meetings that are scheduled to kick off next week, from 13 to 18 October.
The anticipated discussions pave the way for initiating the talks between the IMF and the Egyptian side in terms of the completion of the fifth and sixth reviews under the current Extended Fund Facility (EFF) $8 billion loan programme, along with the first review of the newly-approved Resilience and Sustainability Facility (RSF) $1.3 billion loan deal.
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