The surplus of Egypt’s balance of payments increased threefold in the first half (1H) of FY 2020/21 (from July to December 2020).

According to the Central Bank of Egypt (CBE), the surplus recorded $1.5 billion, up from about $411 million in the corresponding period of FY 2019/20.

The CBE attributed the hike to the uptick in foreign direct investment (FDI) inflows.

Accordingly, investment inflows to Egypt’s securities portfolio rose to $10.2 billion in 1H of FY 2020/21, up from $273.6 million in the same half of FY 2019/20, reported the CBE.

On the other hand, FDI inflows to Egypt fell in 1H of FY 2020/21 by 32.3 percent to reach $3.4 billion, down from about $5 billion in 1H of FY 2019/20, added the CBE.

The decrease was mainly driven by a drop in net FDI inflows in the oil sector that reached $158.8 million in 1H of FY 2020/21, down from $1.4 billion in the corresponding half of FY 2019/20, said the central bank.

CBE data showed that FDI inflows into the non-oil sector declined during 1H of FY 2019/20 to around $711 million. Carry-forward profits and credit balances went down to $2.5 billion.

On the other hand, Egypt’s current account deficit nearly doubled in 1H of FY 2020/21 to post $7.6 billion, up from $4.6 billion in the same half of FY 2019/20, according to the CBE.

The bank attributed the increase to the contraction in the service balance surplus by 69.9 percent in 1H of FY 2020/21 to record $1.9 billion, down from $6.3 billion in 1H of FY 2019/20. The non-oil trade balance deficit dropped by 6.6 percent to record $19.1 billion.

Commodity exports decreased by 9.3 percent in 1H of FY 2020/21 to register $12.9 billion owing to a drop in oil exports by 27.7 percent and the increase in non-oil exports by 72.3 percent of Egypt’s total exports, the CBE stated.

Meanwhile, Egypt’s GDP (in fixed prices) increased by 1.3 percent to about EGP 2 trillion during 1H of FY2020/21, up from $1.9 trillion in the corresponding half of FY 2019/20. The GDP (in current prices) also rose by 6.1 percent to post EGP 3.2 trillion, up from EGP 3.1 trillion in 1H of FY 2019/20.

Egypt’s FY 2021/22 budget, beginning on 1 July, and its targets renew the pre-coronavirus trend towards fiscal consolidation after the pandemic-induced setbacks of FY 2019/20 and FY 2020/21, the credit rating company Moody’s said in March.

Moody’s, which rates Egypt at B2 stable, also said that Egypt’s FY 2021/22 budget projections are broadly in line with its expectations.