Egypt’s balance of payments surplus triples to record $1.5 bln: CBE
Doaa A.Moneim, , Thursday 3 Jun 2021
The CBE attributed the hike to the uptick in foreign direct investment (FDI) inflows


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.

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