Egypt’s current account deficit drops by half in April-June quarter

CAIRO (Reuters) – Egypt’s current account deficit fell by almost half in the April-June quarter as non-oil imports tumbled by nearly 20% from the previous quarter, the central bank said in balance of payments figures released on Wednesday.

Imports have been suffering from an acute shortage of foreign currency since Russia invaded Ukraine in February, partly because of a flight of dollars from Egyptian treasury markets and a drop in Russian and Ukrainian tourists.

The current account deficit declined to $2.96 billion from $5.79 in January-March and $5.13 billion in April-June a year earlier, the central bank data said.

Non-oil imports in April-June dropped by $3.84 billion from the Jan-March quarter to $16.69 billion. This compares to $16.74 billion in April-June 2021.

Tourism receipts increased to $2.56 billion from $1.75 billion a year earlier as travel recovered from the impact of COVID-19, even as Russian and Ukrainian tourists numbers fell off sharply after the Ukraine crisis.

Remittance payments from Egyptians working abroad climbed to $8.28 billion in April-June from $8.05 billion a year prior, while Suez Canal revenue rose to $1.91 from $1.56 billion.

The figures showed that outflow of portfolio investments related to the Ukraine war slowed to a net 3.74 billion from $14.75 billion in January-March. This compares to a net inflow of $2.76 billion a year earlier.

Net foreign direct investment rose to $1.59 billion from $427.2 million in April-June 2021, partly the result of the sales of state assets to Gulf investment funds. Egypt earned $4.08 billion in Jan-March of this year, partly from similar sales.

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