Balance of payments surplus, current account deficit both grow in 2014/15

Egypt’s financial transactions with the rest of the world during the 2014/15 fiscal year resulted in an overall balance of payments surplus up US$3.7 billion, up from $1.5 billion the year before, according to the Central Bank of Egypt.

Despite the overall surplus, the country’s current account deficit — which tracks the value of the flow of goods, services and cash in and out of the country — widened to $12.2 billion in FY2014/15, from $2.7 billion a year before.

The rise in the overall balance of payments surplus was driven by increasing inflows to the country’s financial account, which grew to $17.63 billion, compared to $5.29 billion a year earlier.

The financial account posted an increase in foreign direct investment, which reached $6.37 billion, compared to $4.12 billion a year earlier.

This increase was overshadowed by a 144 percent jump in so-called “other investments,” which rose from $5 billion in 2013/14 to $12.2 billion in 2014/15.

On the current account side, the deficit was again driven by falling exports and rising imports. Egypt’s trade deficit expanded by almost 14 percent to reach $38.8 billion during the fiscal year. Exports of oil products and non-oil commodities both fell, but the Central Bank attributes much of the shrinking export figures to a $3.7 billion drop in crude oil export revenues thanks to to drop in global petroleum prices.

Imports also rose slightly in 2014/15, driven by a US$1.6 billion increase in Egypt’s non-oil imports.

Private transfers—the bulk of them in the form of worker remittances—rose slightly to reach $19.2 billion. However, this was outweighed by a decline in cash and commodity transfers from governments, which fell from $11.92 billion in 2013/14 to $2.6 billion in 2014/15.

Tourism revenues reached $7.4 billion, compared to $5.1 billion a year earlier, contributing to an overall rise in service receipts, which grew to $4.7 billion after recording $978 million the year before.