Current Account Deficit
According to a recent report from the Central Bank of Egypt (CBE), remittances climbed by 84.4 percent to reach $8.3 billion in the first quarter of FY 2024/2025, providing partial relief to Egypt's balance of payments (BoP), which registered a $991.2 million deficit.
Mubarak explained that the Suez Canal, a major source of foreign currency for Egypt, used to generate around $750 million per month, but has seen revenues significantly decrease, averaging $300 million per month this year.
However, the report warns that risks remain, particularly if non-oil exports fail to meet expectations or if import costs rise at a faster rate.
The $4.1 billion surplus recorded during the July 2023 – March 2024 period was bolstered by strong capital inflows, which included Foreign Direct Investment (FDI) soaring to $23.7 billion, a three-fold increase from the previous year's $7.9 billion
The current account deficit narrowed by $ 629.8 million to $ 1.4 billion (compared to $ 2.0 billion), mainly due to the decline in the non-oil trade deficit and the increase in current transfers.
The central bank attributed the drop in the deficit to the impact of currency liberalisation. Egypt let its pound float in late 2016 as part of an IMF-backed economic reform programme.
