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Central Bank economically reflects on Egypt’s BOP - Daily News Egypt

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Central Bank economically reflects on Egypt’s BOP

Central Bank of Egypt: current account deficit retreated by 45% to reach $ 5.6bn from $10bn

The Central Bank of Egypt’s (CBE)  (Abdelazim Saafan/DNE Photo)
The Central Bank of Egypt’s (CBE)
(Abdelazim Saafan/DNE Photo)

The Central Bank of Egypt (CBE) stated that Egypt’s transactions with the world unfolded an overall Balance of Payments (BOP) surplus of $237m, against a deficit of $11.3bn the previous year, according to an official statement issued on 25 September.

“The drop in the trade deficit by 7.6% to $31.5bn (against $34.1bn), reflecting the 3.6% rise in merchandise exports to $26.0bn (from $25.1bn), and the 2.9% decline in merchandise imports to $57.5bn (from $59.2bn),” read the statement.

“Our exports increased due to the increase in the value of petroleum, which is one of the main exports. As for the imports, the inflation we have witnessed lately and the rise in the value of the dollar against the Egyptian pound somewhat limited our imports,” Sherif El-Kheriby, an economic analyst and the CEO of Comesa Company for Trade and Marketing, said.

The CBE added that services surplus increased by 19.8% and reached 6.7bn, compared to 5.6bn the preceding year. This climb was the result of a 7% surge in the transportation receipts that were driven by Egyptian navigation and aviation companies. The 3.5% increase in the tourism revenues also helped increase the services profits, as tourists registered 142.2 million nights spent against 131.8 million during the fiscal year 2011/2012.

On the other hand, Suez Canal receipts decreased by $0.2bn, dropping from $5.2bn to $5bn.

“It has more to do with economic trade/supply and demand traffic rather than the political turbulence that Egypt is witnessing,” a logistics expert and professor, who preferred to remain anonymous, told the Daily News Egypt.

Another decline was observed in the net inflows of Foreign Direct Investments, which retreated by $1bn, reaching $3bn. The Central Bank said that this was mainly ascribed to the drop in the proceeds of selling local entities to non-residents, which fell from $1678.2m to $281.7m.

The CBE pointed out that increases in net inflows were in “Greenfield investments, which rose to $2.4bn (from $2.1bn), and those of net oil sector investments increased to $255.5m (from $130m).”

The Central Bank gave a statement to the rest of the world concerning its liabilities: “[Liabilities] increased to $6.5bn (from $1.2bn), mainly because of the pickup in the deposits transferred from some Arab countries.”

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