The balance of payments (BOP) ran an overall surplus of $1.9bn during the first quarter (Q1) of the fiscal year 2016/2017 versus an overall deficit of $3.7bn during Q1 of FY 2015/2016, according to the Central Bank of Egypt (CBE).
The CBE explained in a statement on Thursday that capital and financial transactions registered net income estimated at $7.1bn compared to $1.6bn during the same period the previous year.
In terms of current accounts, the CBE noted that the balance of trade deficit declined by $1.3bn at a rate of 13.4% to register $8.7bn compared to $10bn. This is due to the $530.3m increase in merchandise exports, and the $810.5m decline in merchandise imports.
The CBE said that merchandise export proceeds increased by 11.2% to $5.3bn, compared to $4.7m during the same period the previous year, due to the $666.7m increase in non-oil exports, and the $136.4m decline in oil exports. As a result of the fall in crude oil prices by 8.4%, exported quantities decline by 10.5% compared to the same period last year.
The CBE added that merchandise exports declined by 5.5% to $14.7bn, because non-oil import payments declined by $583.3m and oil import payments decreased by $227.2m.
The balance of service surplus decreased by 50.2%, due to the decline in tourism revenues by 56.1% to $758.2m compared to $1.7m in the same period the previous year. This is despite the fact that average spending by tourists per night increased from $72.7 the year prior to $82.5.
On the other hand, travel payments increased to $1.1bn compared to $791.5m due to higher visa card payments with $371m. Consequently, travel balance achieved net outflows.
The CBE pointed out that Suez Canal transit receipts declined by 4.8%, to register $1.3bn, against $1.4bn during the comparison period, as net tonnage of transiting vessels fell by 2.7% and SDRs depreciated vis-à-vis the US dollar by 0.4%.
The income balance achieved a net outflow of $1.1bn, primarily because investment income payments registered $1.2bn in the period in question (64.1% of which were profit transfers by oil and non-oil foreign companies operating in Egypt). Meanwhile, investment income receipts registered only $81.6m.
The CBE said that net transfers decelerated by 21.3%, to $3.39bn (against $4.32bn), mainly ascribable to lower net private transfers from $4.29bn to as low as $3.36bn, given the drop in workers’ remittances by 22.3%. On the other hand, net official transfers increased from $21.9m to $33.8m.
In terms of capital and financial account, the CBE explained that net inflows of foreign direct investment in Egypt rose from $1.4bn the previous year to $1.9bn, due to the increase in net inflows for oil sector investments by 221.5% to $495.5m (from $154.1m the previous year). Total inflows for greenfield investments recorded $1.6bn against $1.2bn.
The CBE added that the investments portfolio in Egypt unfolded a net outflow of $840.9m compared to $1.4bn during the same period the previous year, principally due to Egypt’s repayment of bonds in the amount of $1bn (outflows).
Medium- and long-term loans and facilities achieved net disbursements of $855.5m against net repayments of $573.0m.
The net change in the liabilities of the CBE to the external world increased, thereby registering a net inflow of $3.4bn in the reporting period against $1.2m due to new deposits from some Arab countries.
The net change in banks’ liabilities rose, recording a net inflow of $1.6bn versus $668.9m.