Merchandise trade deficit keeps narrowing to $8.4B in Q4: Pharos

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Wed, 13 Sep 2017 - 10:18 GMT

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Wed, 13 Sep 2017 - 10:18 GMT

Trade containers - PxHere

Trade containers - PxHere

CAIRO – 13 September 2017: Pharos Holding reported Tuesday that Egypt’s merchandise trade deficit continued to shrink to $8.4 billion in the fourth quarter of the fiscal year of 2016/17 thanks to a lower oil trade deficit.

The non-oil trade deficit fell to $7.3 billion in Q4 from $7.8 billion in the previous quarter, as the non-oil imports decreased to $11.1 billion from $11.6 billion in Q3.

On the other hand, the petroleum trade deficit inched down to $1.1 billion in the last quarter of the year, after registering $1.4 billion in the third quarter, the statement said.

Tourism revenues rose to $1.5 billion in Q4 from $1.3 billion in Q3, which contributed to the increase of the services surplus from $2 billion to $2.3 billion. Meanwhile, Suez Canal receipts remained flat at $1.2 billion in the fourth quarter.

Remittances of Egyptian workers abroad jumped to $4.8 billion in Q4, compared to $4.6 billion in Q3, which contributed to narrowing the current account deficit to $2.4 billion from $3.5 billion.

Egypt’s net foreign direct investments (FDI) have increased to $13.3 billion in the last fiscal year (FY) 2016/2017, compared to $12.5 billion in the previous fiscal year, with a 6.5 percent increase, which continued to support the financial account, Pharos said.

The cumulative net direct investments went up 14.5 percent year-on-year to $7.9 billion in FY2016/17 from $6.9 billion in the previous year. Meanwhile, the net borrowing rose 8.4 percent from $7.1 billion to $7.7 billion.

“We note that the FDI coverage of the current account deficit, excluding grants, continued to improve from $-4.3 billion in Q4 of FY2015/16 ($-1.3 billion in Q3 of FY2016/17) to $-1.1 billion in Q4 of FY2016/17,” the statement read.

Moreover, the fundamental balance of payments (BoP) indicator hiked to $5.5 billion in Q4, up from $2.8 billion in Q3.

Pharos expected the BoP fundamentals to continue improving in FY2017/18, backed by lower petroleum trade deficit as Zohr gas production, higher FDIs following the introduction of the new investment law and higher tourism revenues kick in.

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