Egypt reduces its balance of payments deficit to $1.8 billion, marking a significant improvement in its economic performance.

Egypt’s Balance of Payments Deficit Decreases to $1.8 Billion

Recent data from the Central Bank of Egypt indicates a significant improvement in the balance of payments for the period from July to March of the fiscal year 2025/2026. The overall deficit decreased by 2.9%, reaching $1.8 billion, down from $1.9 billion during the same period last year.

Increase in Capital and Financial Flows

The Central Bank reported a notable rise in net inflows, which reached $9.9 billion. This increase stems from a robust net inflow of foreign direct investment (FDI), totaling $13 billion. A significant contributor to this figure was the Ras Al-Hikma deal, which accounted for $3.5 billion. Conversely, investments in securities recorded a net outflow of approximately $4.4 billion, primarily due to substantial withdrawals during the regional conflict from January to March 2026.

Current Account Deficit

The current account recorded a deficit of $14.6 billion, influenced by several key factors:

• The trade deficit increased to $47.8 billion, marking a 24.6% rise.
• Non-oil imports surged to $61.9 billion, reflecting a 15.6% increase.
• The oil trade deficit expanded to $13.1 billion, up by 26.8%.

Despite these challenges, several factors mitigated the worsening of the deficit. Notably, remittances from Egyptians abroad rose to $34.9 billion, a 32% increase. Additionally, tourism revenues grew to $14.4 billion, up 14.9%, and Suez Canal revenues increased to $3.2 billion, reflecting a 22.1% rise due to higher cargo volumes and an increased number of transiting vessels.

Foreign Direct Investment Insights

Foreign direct investment in non-oil sectors reached $13.5 billion. However, the oil sector experienced a net outflow of approximately $482 million, attributed to decreased new investments and increased remittances to foreign partners.

Furthermore, banks’ foreign assets rose by about $3.4 billion, while the Central Bank’s liabilities decreased by approximately $1.7 billion. Medium- and long-term loans and facilities recorded a net utilization of $2.7 billion.

The data reflects Egypt’s ongoing efforts to stabilize its economy amid challenging conditions, showcasing resilience in attracting foreign investment and increasing revenue streams.

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