Egypt's Central Bank (Reuters)
The fall in net official transfers and the rise in the trade deficit pushed Egypt's current account deficit to $12.2 billion in the year ending 30 June, from $2.7 billion during the same period the previous year.
"The deterioration in the current account balance largely reflected a drop in official transfers," Jason Tuvey, economist at London-based Capital Economics, said in an emailed statement.
Net official transfers, commodity and cash coming in and out of Egypt, dropped to $2.7 billion from $11.9 billion, the Central Bank of Egypt (CBE) said in a press release Wednesday.
The trade deficit fell by 13.9 percent to $4.7 billion in the same period, as oil exports dropped by $4 billion to hit $22.1 billion on the back of declining global oil prices, while non-oil imports increased by $1.6 billion.
Global oil prices fell drastically following an OPEC decision in November 2013 to maintain supply amid slowing global demand.
Revenues from tourism recovered to $7.4 billion from $5.1 billion.
However, higher foreign direct investment and the inflow of deposits from Gulf States drove up Egypt's balance of payments surplus, depicting the country's transactions with the rest of the world.
The balance of payments recorded a surplus of $3.7 billion in the fiscal year ending 30 June, up from $1.5 billion in the same period the previous year.
"The fall in official transfers doesn’t reflect a decline in financial support from the Gulf. Instead, it reflects a switch as to how that support is provided," said Tuvey.
Gulf Arab countries deposited $6 billion in Egypt's Central Bank in April, which raised the bank's liabilities to the external world to a net inflow of $5.5 billion.
Foreign direct investment net inflow to Egypt increased to $6.4 billion in FY2014/15 up from $4.1 billion. The rise was driven by a 69.1 percent increase in greenfield investments.