Egypt’s transactions with the external world from July to December of fiscal year (FY) 2015/2016 facilitated an increase in the Balance of Payments (BOP) overall deficit to $ 3.4bn, compared to $ 1bn in the same period FY 2014/2015.
The current account deficit stands at to $ 8.9bn, compared to $ 4.3bn in the same period last FY, according to a press release from the Central Bank of Egypt (CBE).
Meanwhile, the capital and financial account registered a net inflow of $9.2bn compared to $ 772.1m in the last FY.
The CBE statement said the current account deficit came on the back of the trade deficit, which registered $19.5bn compared to $20.4bn in the last FY.
The statement attributed the decline to the decline in world prices of oil and other staple commodities, which had a significant bearing on Egyptian exports and imports.
“Merchandise export proceeds declined by 26.0%, to stand at $ 9.1bn compared to $12.3bn in the last FY,” the statement read. “The contraction was traceable to the drop of $2.2bn in oil exports (crude oil and products), in the wake of the fall of global prices of crude oil (51.4% and 43.4% in the first and second quarters of the FY 2015/2016, respectively)”.
The statement noted that proceeds from oil products also declined by 31.4%, and so did those from non-oil exports by $ 972.7m, to post $ 6.0bn.
The widening of the trade deficit was held back by the 12.6% drop in commodity imports, recording $28.6bn compared to $32.7bn in the last FY, largely on the back of the declines of $2.6bn and $1.6bn in non-oil imports and oil imports, respectively.
According to the services surplus, it narrowed by 45.5% to just $2.2bn compared to $4.1bn in the same period in the last FY.
The statement said this figure was driven by lower services and income receipts that registered $9.3bn compared to $12.5bn in the mentioned period last FY.
The CBE pointed out the rise in net inflows of foreign direct investment in Egypt from $2.6bn to $3.1bn; however, the portfolio investment in Egypt achieved a net outflow of $1.6bn compared to $2.1bn in the last FY.