Egypt’s balance of payments reflected broadly positive trends during fiscal year (FY) 2024/2025, with the current account deficit narrowing significantly by 25.9% to $15.4bn, compared to $20.8bn in the previous fiscal year, according to the Central Bank of Egypt (CBE).
This improvement stemmed from stronger external transactions, particularly during the second half of the fiscal year (January–June 2025), when the current account deficit dropped by 59.9% compared with the same period a year earlier. The CBE attributed this progress to a surge in remittances from Egyptians working abroad, a marked increase in the services surplus, and solid growth in non-oil exports.
Remittances rose by 55.3%, while the services surplus expanded by 49.6%, supported by a 21% increase in tourism revenues. Non-oil merchandise exports jumped by 38.9%, contributing to a decline in the non-oil trade deficit, alongside a moderate improvement in the investment income balance.
On the financial side, the capital and financial account recorded net inflows of $10.2bn, compared with $29.9bn in the previous year. This decline mainly reflected the absence of the exceptional inflows of $35bn from the Ras El-Hekma investment deal, which had boosted the previous year’s figures. Overall, Egypt’s balance of payments registered a manageable overall deficit of $2.1bn, compared with a surplus of $9.7bn in the preceding fiscal year. The CBE emphasised that this outcome reflects the continuing structural improvement in the current account and the transitory nature of last year’s exceptional inflows.
Improvement in the Current Account
Several key factors contributed to the narrowing of the current account deficit. Chief among them was the sharp rise in workers’ remittances, which recorded unprecedented inflows of $36.5bn, compared with $21.9bn in the previous year. This surge indicates growing confidence among Egyptians abroad and a return of foreign exchange flows through formal channels.
Tourism also performed strongly, with revenues increasing by 16.3% to $16.7bn, up from $14.4bn in the preceding year. The rise was driven by a notable increase in the number of tourist nights, which reached 179.3m compared to 154.1m a year earlier. The continued recovery of the tourism sector was supported by diversified destination offerings, improved infrastructure, and increased arrivals from Europe and the Gulf.
In addition, the investment income deficit narrowed by 9.6% to $15.8bn, down from $17.5bn. Investment income receipts rose by 50.1% to $2.9bn, while payments fell by 3.7% to $18.7bn. This improvement was largely due to higher returns from Egyptian investments abroad and reduced profit repatriations and interest payments.
Factors Limiting Further Improvement
Despite these positive developments, certain factors weighed on the overall current account balance, particularly higher import bills and lower receipts from the Suez Canal.
The oil trade deficit widened to $13.9bn, compared to $7.6bn in the previous fiscal year. This was primarily driven by a substantial rise in oil imports, which increased by $6.1bn to $19.5bn. The surge reflected higher imports of natural gas, which rose by $3.9bn, oil products by $1.7bn, and crude oil by around $495m due to increased import volumes.
Oil exports, meanwhile, declined slightly by $128m to $5.6bn, as lower exports of crude oil and natural gas—down by $698m and $513m respectively—offset a $1.1bn increase in oil product exports, which benefitted from higher exported quantities.
The non-oil trade deficit also widened, reaching $37.1bn compared to $31.9bn in the previous fiscal year. Non-oil import payments increased by $13bn to $71.7bn, with the rise concentrated in essential commodities such as soya beans, wheat, corn, car parts, and raw tobacco. Non-oil merchandise exports, however, recorded solid growth, rising by $7.8bn to $34.6bn, driven by increased exports of gold, fruits, vegetables, ready-made garments, and aluminium products.
Meanwhile, Suez Canal revenues came under pressure, declining by 45.5% to $3.6bn, compared with $6.6bn a year earlier. The drop reflected the impact of disruptions to global shipping routes and the Red Sea security situation. The number of vessels transiting the canal fell by 38.5% to 12,400, while net tonnenage declined by 55.1% to 482.8m tonnes. However, the second half of FY 2024/2025 showed signs of stabilisation, as Suez Canal receipts edged down only slightly by 1.4%, standing at $1.8bn compared to $1.83bn in the same period of the previous year.
Capital and Financial Account Developments
The capital and financial account recorded net inflows of $10.2bn, down from $29.9bn a year earlier. Despite this decline, the underlying components of foreign investment and external financing remained relatively stable.
Foreign direct investment (FDI) totalled $12.2bn, compared with $46.1bn in the previous fiscal year. Excluding the exceptional Ras El-Hekma inflows, FDI performance remained solid, underpinned by continued investor interest in non-oil sectors. FDI to non-oil activities reached $11.6bn, reflecting capital increases and greenfield projects worth $5.5bn, including $354m in new ventures. Inflows from real estate purchases by non-residents amounted to $1.9bn, while sales of local entities to foreign investors generated $399.8m. Reinvested earnings contributed a further $4.2bn.
In the oil sector, FDI recorded a net inflow of $598.3m, reversing a net outflow of $351.6m in the previous year. This turnaround resulted from a rise in inflows to $6.2bn, primarily from greenfield investments by international oil companies, alongside a reduction in outflows—representing cost recovery for exploration and development—to $5.6bn compared with $6bn previously.
Portfolio investment in Egypt recorded a net inflow of $1.6bn, compared with $14.5bn in FY 2023/2024. This reflected a more stable but cautious outlook among investors following the unusually high inflows of the preceding year.
Medium- and long-term loans and facilities registered a net repayment of $3.5bn, compared to $2.4bn in the prior year, due to higher principal repayments of $12.4bn against disbursements of $8.9bn. The change in the CBE’s liabilities showed a net inflow of $3.6bn, reversing a net outflow of $7.8bn a year earlier. Similarly, banks’ liabilities recorded a net inflow of $3.4bn, compared with a net outflow of $2bn, indicating improved liquidity and stronger external positions within the banking system.
Outlook and Structural Trends
Despite the shift from an overall surplus to a modest deficit, the FY 2024/2025 outcome represents a move toward a more sustainable and balanced external position. The narrowing of the current account deficit—driven by record remittances, strong tourism receipts, and rising non-oil exports—offset much of the pressure from higher energy imports and weaker Suez Canal revenues.
According to the CBE, the persistent improvement in recurrent inflows, especially from remittances and services, strengthens Egypt’s external resilience and underpins the country’s foreign exchange stability. The moderation in capital and financial inflows compared to last year’s exceptional levels signals a return to more normalised and diversified sources of external financing.
Overall, the CBE noted that the underlying structure of Egypt’s balance of payments remains sound, with steady progress toward correcting imbalances and enhancing the country’s capacity to absorb external shocks, paving the way for a more sustainable external position in the coming years.
