The trade deficit increased by 4.4% in the third quarter (Q3) of fiscal year (FY) 2014/2015 the Central Agency for Public Mobilization and Statistics (CAPMAS) stated in its latest report.
The deficit recorded $9.4bn in Q3 of FY 2014/2015 up from the $9bn that was registered in the same period the preceding year.
(AFP photo)
The report further showed that total exports in the specified period amounted to $4.6bn, down from the $6.4bn registered in the same period the year before or in FY 2013/3014, marking a 28.1% decrease.
Meanwhile total imports declined from $15.4bn in FY 2013/2014 to reach $14bn in FY 2014/2015, marking a 9.1% decrease.
Last July, CAPMAS revealed that Egypt recorded a trade deficit of EGP 24.60bn in April 2015.
It is generally common to find recorded deficits in CAPMAS reports that illustrate the trade balance, as Egypt generally imports more than it exports. The country is the largests wheat importer in the world and it also imports other products such as petroleum, motor vehicles, medicines and pharmaceuticals amongst several other products.
Earlier this month the Ministry of Industry and Foreign Trade announced it has finalised an executive regulation of Law 5/2015 to create a preference for Egyptian industrial products in government contracts.
The regulation pertains to industrial products only, stating that the proportion of Egyptian components in industrial products should not be less than 40%. In addition, the regulation requires stakeholders to commit to the proportion within their procurement contracts.
Several experts have seen the new regulation as a mean for decreasing imports from abroad and saving on hard currency, as well as encouraging local product development.
Other decisions were also taken by the government to protect local products and decrease the dependency on imports. Some of which were met with controversial reactions.
In April for instance, Minister of Industry and Foreign Trade Mounir Fakhry Abdel Nour imposed protection fees on imported rebar steel, at 8% for one tonne, or no less than EGP 408 per tonne.
Some were in favour of the decision, but others saw it as a negative step that will have a harmful impact on low income people who will suffer from increased prices of residential units.
Furthermore, the ministry decided in April to stop imports of products that have features of Egyptian folklore and antiquities.
Egypt aims to generate $28bn in non-petroleum exports in 2015, the Ministry of Industry and Foreign Trade revealed in its Foreign Trade Digest report in February. The figure is expected to occur throughout 13 sectors, including medical industries, agriculture products, engineering and electronic products, food industry, ready-made clothes, chemical and fertiliser products, building materials, furniture, leather products, footwear and handicrafts, according to the report.
