Imports grew sharply in August (Photo: DP-Sokhna Port)
The deficit in Egypt’s trade balance has grown by 22 per cent in August 2011 over August 2010 to reach LE18.1 billion ($3 billion), according to data from Egypt’s official statistics body, CAPMAS.
The significant annual increase in trade deficit is mainly attributed to the surge in imports, which rose by 16.2 per cent, heavily weighted by the increase in wheat and basic steel materials. This was partially offset by a 9 per cent increase of exports that reached LE13.3 billion.
On a monthly basis, the deficit grew by LE4.6 billion in August 2011 above July 2011, whereas exports dropped by LE2.6 billion and imports grew by LE2 billion.
The growth in trade deficit puts more downward pressure on the Egyptian pound, which has already been on the low since an uprising overthrew president Hosni Mubarak and led to an exodus of foreign investors and tourists.
Egypt's net foreign reserves slid by US$1.93 billion in October, their worst drop since April, as investors dumped more treasury bills and other assets because of uncertainty over a peaceful transition to civilian rule, analysts said.
Reserves dropped to $22.1 billion in October from $24.01 billion a month earlier, the central bank said on its website.
The decline was almost double the drop a month earlier. Reserves were $36 billion before the 25 January uprising.
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