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$3.7bn surplus in balance of payments for FY 2014/2015: CBE - Daily News Egypt

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$3.7bn surplus in balance of payments for FY 2014/2015: CBE

FDI in Egypt increased to $6.4bn the past FY

The Egyptian economy transactions during fiscal year (FY) 2014/2015 achieved a surplus of $3.7bn in the balance of payments, against a surplus of about $1.5bn in FY 2013/2014, according to the Central Bank of Egypt (CBE).

The CBE added that the surplus in the balance of payment in FY 2014/2015 came as a result of capital and fiscal transactions achieving net inflow of about $17.6bn, against $5.3bn in FY 2013/2014. This was due to the increase in foreign investments in Egypt, and deposits by Arab banks at the CBE.

The current account deficit increased to about $12.2bn, against $2.7bn in the last FY.

According to the CBE, this increase came on the back of the trade deficit rising to $4.7bn or 13%, to register $38.8bn in FY 2014/2015, against about $34.1 in the previous FY, due to the 15.5% decline in merchandise exports, recording $22.1bn against $26.1bn in FY 2013/2014.

The bank explained that the decline in merchandise exports was traceable to a $3.7bn drop in oil exports proceeds, in light of the fall in global oil prices by 28.7%, 50.1%, and 43.1% in Q2, Q3, and Q4 of FY 2014/2015, compared to the same period of the preceding FY. This is in addition to the decline in oil products exports, as well as the $0.3bn decline in non-oil commodities in FY 2014/2015.

The CBE pointed out the slight increase in merchandise imports by $0.7bn, or 1.1%, in FY 2014/2015 compared to the preceding year, to register $60.8bn. This came as a direct result of the $1.6bn rise in non-oil imports, while oil imports decreased by $0.9bn.

The CBE added that the net unrequited transfers fell to $21.9bn, from $30.4bn, due to the retreat in net official transfers (commodity and cash) from $11.9bn to as low as $2.7bn.

In contrast, services and income balance ran a surplus of $4.7bn, versus $978.5m during FY 2013/2014.

The CBE added that this surplus stemmed primarily from the 45.3% surge in tourism revenues, to register $7.4bn, against $5.1bn, supported by the 36.1% rise in tourist nights, to post 99.2m nights, versus 72.9m last year.

The capital and financial account registered a net inflow of $17.6bn during the last FY, compared to $5.3bn during the previous FY, due to the rise in the net change in the CBE’s liabilities to foreign countries, registering a net inflow of $5.5bn in FY 2014/2015, against $1.9bn during FY 2013/2014, largely due to the increase in the deposits from some Arab countries.

The CBE explained that the net inflows of foreign direct investment (FDI) in Egypt increased from $4.1bn to $6.4bn during the last FY.

Net inflows for greenfield investments increased by 69.1%, recording $3.8bn, compared to $2.2bn the previous year. Those for oil sector investments increased to $1.7bn, compared to $1.6bn. Investments in real estate purchases increased to $776.2m from the $133.7m achieved last year.

The CBE pointed out that the portfolio investment in Egypt from net inflow achieved $1.2bn, compared to a net outflow of $638.6m. This was the outcome of the repayment of bonds that were due in the last year, amounting to $2.5bn, and of foreigners’ subscriptions of $1.35bn for bonds issued by the Egyptian government in the same year.

Foreigners’ net investments on the stock exchange amounted to net purchases of $481.2m, compared to $444.5m a year earlier, according to the CBE.


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