Egypt’s current account deficit narrowed by 10.2% to USD 16.6 bn in FY 2021-2022, buoyed by oil and non-oil exports, rising tourism receipts, and a jump in FDI, according to central bank figures
“These developments came despite the decline in global economic activity triggered by the Russian-Ukrainian crisis, which has driven up energy and commodity prices significantly,” leading to a monetary tightening wave to put a cap on inflation, the central bank said.
The brightest spot: Tourism receipts more than doubled y-o-y to USD 10.7 bn as tourist arrivals gained momentum after a slump triggered by the war in Ukraine, which had a significant impact on tourism from Russia and Ukraine — two of our key tourism markets. Tourist arrivals increased more than 85% y-o-y in 1H 2022 to reach 4.9 mn visitors.
Egypt has been working overtime to attract visitors from other European markets to drive inbound traffic, with efforts also including luring tourists from little-tapped markets in Latin America and other markets, including the Gulf.
FDI also picked up steam during the year: Net foreign direct investment rose 71.4% y-o-y to USD 8.9 bn during the fiscal year that ended in June. Net FDI in the non-oil sector recorded USD 11.6 bn, the majority of which came in during 2H 2021-2022.
Greenfield investments and capital increases from existing companies accounted for USD 3.4 bn of non-oil FDI, according to the balance of payments.
Rising natgas prices + bigger export volumes moved our oil trade to the positives: Egypt’s oil trade balance recorded a USD 4.4 bn surplus for the year, from a deficit of USD 6.7 mn during FY 2020-2021, thanks to the global hike in natural gas prices and our entry to new markets including Turkey, Italy, France and Greece.
