Egypt’s Balance of Payments (BOP) registers an overall surplus of $3.7bn between July and September of the fiscal year 2013/2014, a significant improvement compared to the $518.7m deficit during the same period last year, according to an official statement issued by the Central Bank of Egypt.
The current account also ascended to reach $757m, compared to $1.3bn deficit during the same period last year. The bank attributed the increase in the “net un-required transfers”, between July and September of the fiscal year 2013/2014, rising from $4.9bn during the fiscal year 2012/2013 to $8.3 bn.
The bank added that the shrinking trade deficit also contributed to surplus unfolding in Egypt’s transactions with the world.
“The trade deficit shrank 1.6 % to $ 7.7bn, from $7.8bn, reflecting a decline in merchandise imports by 1.5 % to $13.6bn, from $13.8bn, and a lesser decline of 1.3 % in merchandise exports, to register $5.9bn against $6bn,” the bank said in its statement.
The bank stated, however, that rise in the surplus in the account was mitigated by the dramatic fall, around 91.8 %, in the service surplus.
The service surplus dropped from $1.6bn to $135.8m during the same period this year. This drop was driven by the plummeting tourism revenues, dropping by 64.7 % and making $931.1m revenues against $2.6bn the previous year.
The bank’s statement also added that “the number of ‘tourist nights’ fell by 57 % to 15.3m, from 35.5m, and in visitor’s average spending from $74.4 to $ 61 per night.”
The “capital and financial account” witnessed $2.5bn rise to reach $4bn, from the $1.5bn registered last year, due to the increases in the portfolio investment in Egypt as well as accelerating Foreign Direct Investments (FDIs).
The portfolio investments reached a net inflow of $1.3bn, compared to the $327.1m outflow of last year. These increases were due to the issuance of Egyptian government bonds in the value of $1bn.
The FDI also witnessed a minimal increase, stepping up by 7.1 %, reaching $1246.4m.The bank attributed the FDI increases to the “increase in the net inflows for the oil sector by 44.2 % to $ 878.6m, from $609.2m.”
The CBE reported, in September, that FDIs in Egypt were valued at $1bn. The bank added that the low level of investment was ascribed “to the drop in the proceeds of selling local entities to non-residents, which fell from $1678.2m to $281.7m.”
The net liabilities of the CBE jumped to $3bn, from $503.1m. The acceleration in the liabilities was due to the deposits transferred from some Arab countries.