Egypts Economy Shows Great Signs Of Recovery

By The Exchange Last updated May 12, 2021

According to a data released on Monday by the Central Bank of Egypt, Egypt’ s current account deficit climbed to $7.6 billion in the first half of the current FY2020/2021 from July to December 2020 up from $4.6 in the same half of FY2019/2020. Photo Courtesy: Central Bank of Egypt. In April 13 this year the non-oil trade deficit widened by 6.6 percent to record$ 19.1…

According to a data released on Monday by the Central Bank of Egypt, Egypt’s current account deficit climbed to $7.6 billion in the first half (1H) of the current FY2020/2021 from July to December 2020 up from $4.6 in the same half of FY2019/2020.

This Increase in the current account deficit is associated to the decline in service balance surplus and the increase in the non-oil trade balance

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According to CBE, due to the decline in the investment income balance Service balance surplus contracted by 69.9 percent in the 1H of FY2020/21 posted $1.9 billion, down from $6.3 billion in the 1H of FY2019/20.

The decline in Investment income had a larger effect on the Tourism sector with the CBE showing that tourism revenues dropped by 75.3 percent in the 1H of FY2020/21, reaching $1.8 billion.

In April 13 this year the non-oil trade deficit widened by 6.6 percent to record $ 19.1 billion, due to higher non-oil imports according to recent data by the Central Bank of Egypt.

Egypt’s trade balance fell further into the red during 2Q2020-2021, reaching $ 10.6 bn as it widened 7 percent from the same period a year earlier.

This was mainly due to a fall in exports, which were valued at $ 6.6 bn during the quarter compared to $ 7.1 bn in 2019-2020.

Meanwhile, imports picked up slightly from last year, rising a little over 1 percent to hit $ 17.3 bn.

The country’s deficit widened 24 percent on a quarterly basis from the $ 8.6 billion deficit recorded in 1Q.

This was largely due to the country spending $ 2.5 billion more on imports in 2Q than 1Q. This is more than double the rate of widening seen between the first and second quarters in 2019-2020, a phenomenon that goes unexplained by the central bank’s data.

On the Flip side Egypt’s trade deficit decreased 1.2 percent in February 2021 to $3.34bn, compared to the $3.38bn reported for February 2020, the Central Agency for Public Mobilization and Statistics (CAPMAS) has revealed.

The data was published, on Tuesday, in the agency’s monthly bulletin of foreign trade data for February 2021.

Value of Exports

In the data CAPMAS quotes the reduction of value of exports by 2 percent to $2.69bn during February 2021, compared to $2.75bn for the same month of the previous year. This was driven by the value of some exports falling, including: potatoes by 17.6 percent; oranges by 58.8 percent; detergents by 21.7percent; and drugs and pharmaceuticals by 42.4percent.

Meanwhile the value of some commodity exports increased during February 2021 compared to the same month of the previous year, the most important of which were: fresh fruits by 23.1percent; garments by 6.0 percent and polymers by 47.7percent

Value of Imports

Meanwhile, the value of Egypt’s imports decreased by 1.6percent, reaching $6.03bn during February 2021, compared to $6.13bn for the same month of the previous year.

This was due to the decrease in the value of imports of some commodities, the most important of which were: crude oil by 61.0 percent; organic and inorganic chemicals by 11.6percent; meat by 11.7 percent; and filaments and vegetable or synthetic fibers by 12.0 percent.

The value of imports of some commodities increased during February 2021 compared to the same month of the previous year, the most important of which were: petroleum products by 39.1 percent; passenger cars by 23.9 percent.; raw materials of iron or steel by 6.7 percent; and medicines and pharmaceuticals by 14.9 percent.

Early This Year Egypt’s balance of trade deficit shrank by 17 percent to $38.291 billion in 2020, compared to $46.225 billion in the prior year, according to the Minister of Trade and Industry, Nevine Gamea.

According to her the government managed to protect the local industries from the repercussions of the coronavirus (COVID-19) pandemic through exceptional measures such as slashing gas and electricity fees and launching several initiatives to pay overdue export subsidies.

The North African nation’s exports inched down by 1 percent to $25.295 billion last year from $25.637 billion in 2019, while imports dropped by 12 percent to $63.587 million in 2020 from $71.862 million a year earlier, Gamea added.

In other economic news Egypt’s revenues from Suez Canal surged by 15.8 percent year-on-year to $551 million in April, from $476 million in the same month in 2020, according to the chairman of the waterway canal authority.

According to Osama Rabie, a total of 1,814 vessels transited the canal waterway carrying 110 million tonnes in April, up from 1,731 ships carrying 102 million tonnes in April 2020.

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