The deterioration was driven by a sharp expansion in the trade deficit and a contraction in the services surplus
Egypt’s external accounts showed significant strain during the first quarter of FY2024/2025, with the current account deficit widening to $5.909 billion, up from $2.807 billion in the same period a year earlier, according to the Central Bank of Egypt’s (CBE) latest balance of payments report.
The deterioration was driven by a sharp expansion in the trade deficit and a contraction in the services surplus, despite a strong increase in remittances and a modest improvement in investment income flows.
The CBE report shows that the overall balance of payments recorded a deficit of $991.20 million, reversing the $228.80 million surplus posted in the same quarter of FY2023/2024. This reversal was largely attributed to the 77.00% increase in the trade deficit, which widened to $14.06 billion from $7.944 billion.
Total imports surged to $23.14 billion, while exports saw a modest rise to $9.08 billion.
Within the breakdown, petroleum imports more than doubled to $5.41 billion, while non-petroleum imports reached $17.73 billion. On the other hand, petroleum exports declined to $1.19 billion, down from $1.60 billion, whereas non-petroleum exports improved to $7.89 billion.
According to the CBE, the services surplus narrowed to $4.05 billion, compared to $5.19 billion in the same quarter of the previous fiscal year.
The decline was mainly due to the continued disruption of shipping activity in the Red Sea, which has significantly impacted Suez Canal revenues—falling to $931.20 million, down from $2.39 billion.
Tourism revenues rose to $4.81 billion, offering some support to the external position. Transport receipts, however, fell to $2.16 billion, compared to $3.45 billion a year prior.
The income balance deficit narrowed slightly, reaching $4.25 billion, down from $4.58 billion. Income receipts rose to $660.60 million, while income payments stood at $4.91 billion, including $1.94 billion in interest payments, the CBE report noted.
The report also highlighted a strong performance in net current transfers, which surged to $8.35 billion from $4.52 billion, largely on the back of workers’ remittances, which nearly doubled to $8.32 billion. Official transfers grew to $49.20 million, from $32.10 million in the same period last year.
On the capital side, the capital and financial account recorded net inflows of $3.79 billion, up from $1.76 billion the year before. The CBE attributed this increase to higher foreign direct investment (FDI) inflows, which reached $2.71 billion, compared to $2.32 billion in the first quarter of FY2023/2024. At the same time, net outflows from portfolio investment in Egypt fell to $384.70 million, down from $523.40 million, indicating tentative signs of improved investor sentiment.
