Egypt’s current account deficit rises to $18.7bn in financial year 2015-16

The country's economy is stil struggling to recover from the 2011 uprising and a subsequent drop in tourism.
Egypt’s current account deficit rose to US$18.7 billion for the 2015-16 fiscal year that ended in June, from $12.1 billion the previous year, central bank data showed.

Egypt’s economy is struggling to recover after a mass uprising in 2011 that drove away tourists and foreign investors and created a shortage of foreign currency that has sapped its ability to purchase from abroad and relaunch key industries.

The trade deficit for the financial year stood at $37.6bn compared with a deficit of $39.1bn last year. The improvement was “partly because of the decline in world oil prices, which had a bearing on Egyptian exports and imports”, the country’s central bank said.

Total exports for the financial year tallied $18.7bn against $56.3bn in imports. Those were each less than the $22.2bn exported and $61.3bn imported last year.

Tourism receipts roughly halved to $3.7bn from $7.3bn a year earlier.

Egypt’s tourism industry, a cornerstone of the economy and a crucial source of hard currency, has struggled to rebound since 2011. The sharp drop is partly because of a suspected bombing of a Russian plane carrying 224 people from a Red Sea resort last October.

Suez Canal receipts, another pillar of the country’s foreign currency, declined by 4.5 per cent to stand at $5.1bn versus $5.4bn last year.

Foreign direct investment rose to $6.8bn, up from $6.3bn a year earlier.

Egypt has reached a staff level agreement for a $12bn loan programme from the International Monetary Fund aimed at plugging its funding gap and rebalancing its currency market, but it must secure about $6bn in bilateral financing to obtain approval for the programme.

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Published: September 21, 2016 04:00 AM


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