Egypt’s current account deficit climbed to $7.6 billion in the first half (1H) of the current FY2020/2021 — from July to December 2020 — up from $4.6 in the same half of FY2019/2020 owing to the decline in service balance surplus and the increase in the non-oil trade balance, according to data released by the Central Bank of Egypt (CBE) on Monday.
Service balance surplus contracted by 69.9 percent in the 1H of FY2020/21 to post $1.9 billion, down from $6.3 billion in the 1H of FY2019/20 due to the decline in the investment income balance, according to the CBE.
As for the decline in investment income, the CBE’s data showed that tourism revenues dropped by 75.3 percent in the 1H of FY2020/21, reaching $1.8 billion.
For the non-oil trade deficit, the CBE said that it increased by 6.6 percent in the 1H of FY2020/21 to record $19.1 billion, driven by the rise in the payments of commodity imports, reaching $28.1 billion, and the increase in payments of commodity exports, reaching $9.3 billion.
The data also showed that oil trade deficit improved in the 1H of FY2020/21, narrowing down to $54.2 million, down from $733.3 million in the same half of FY2020/21.
On foreign direct investment (FDI) inflows, the CBE unveiled that they fell by 32.3 percent in the 1H of FY2020/21 to post $3.4 billion, down from $5 billion, as a result of the decline in FDI inflows into the oil sector and the contraction of non-oil FDI inflows as well.
On the other hand, investments in Egypt’s securities hiked to $10.2 billion in the 1H of FY2020/21, up from $273.6 million in the same half of FY2019/20, according to the CBE.
Regarding the state’s revenues, the data showed that public government revenues in FY2019/2020 recorded EGP 1.1 trillion, while expenses posted EGP 1.5 trillion, resulting in a cash deficit of EGP 459.5 billion and a total deficit of EGP 408.5 billion — representing 7 percent of the country’s GDP.
Insofar as the public debt, the CBE noted that local public debt recorded EGP 4.3 trillion — 74.9 percent of GDP — by the end of December 2019, 87.8 percent of which is due on the government, with a total of EGP 3.8 trillion.
Moreover, external debt grew by 4.6 percent by the end of December 2020, reaching $129.2 billion compared to the end of FY2019/20, with an increase in debt services of $7.8 billion recorded in the 1H of FY2020/21, according to the CBE.
The data also showed that Egypt repaid $5.8 billion in instalments, with $2 billion in interests, during the 1H of FY2020/21.
Egypt’s external debt to GDP ratio narrowed to 34 percent, which is the safe limit according to international criteria.
Regarding the real sector, the data showed that Egypt’s real GDP (in fixed price) rose by 0.7 percent to EGP 982.6 billion in the first quarter (1Q) of FY2020/21, up from EGP 976.1 billion in the same quarter of FY2019/20.
Meanwhile, Egypt’s GDP (in current price) increased by 4.5 percent in the 1Q of FY2020/21, posting EGP 1.6 trillion, up from EGP 1.5 trillion in the 1Q of FY2019/20, according to the CBE.
Executed investments declined by 38.2 percent in the 1Q of FY2020/21 to record $152 billion, 25 percent of these investments were implemented by the private sector, while the remaining 75 percent were public investments, according to the CBE.