$14.9 billion increase in payments for merchandise imports

The Central Bank of Egypt (CBE) said that the increase in the trade balance deficit is due to the increase in payments for imports of goods (oil and non-oil) of about 14.9 billion dollars per year. compared to the corresponding period of the previous fiscal year, which is a reflection of what the world is currently witnessing due to unprecedented waves of inflation.

The CBE announced in a statement on Thursday that the current account deficit remained unchanged in the July-March period of the 2022/21 financial year, with the deficit registering around $13.6 billion, despite the increase in the trade balance deficit of raw materials of 3 billion dollars.

He said that the balance of payments related to Egypt’s foreign relations reached a total deficit of about 7.3 billion dollars during the first 9 months of the last fiscal year.

The central bank pointed out that the total deficit in the balance of payments during the mentioned period was almost entirely recorded during the period (January-March 2022).

The bank said Egypt’s economy was affected by global economic developments like other countries around the world. Apart from the increase in the import bill given the rise in world prices, foreign investments moved out of the equity portfolio, which were paid for without delay.

He explained that this had led to a decline in net inflows to the capital and financial account.

The bank indicated that the current account deficit in the July-March period of the 2021-2022 financial year did not change compared to the same period last year, since it recorded 13.6 billion despite the increase in the trade balance deficit of raw materials by 3 billion dollars.

The bank said that the increase in the trade balance deficit is due to the increase in payments for imports of goods (oil and non-oil) of about 14.9 billion dollars compared to the corresponding period of the previous fiscal year, reflecting what the world is currently experiencing with unprecedented waves of inflation.

He added that these waves resulted from the return of economic activity in sectors closed due to the pandemic and the negative effects of the Russian-Ukrainian crisis in conjunction with the sanctions imposed by the West on Russia, which contributed the unprecedented rise in energy and commodity prices, which has prompted many countries to move towards monetary tightening to deal with this inflation.

The CBE added that net tourism revenue increased by $5.1 billion to $8.2 billion from $3.1 billion in the corresponding period, although it was negatively affected by the absence of tourists from Russia and Ukraine since the outbreak of the crisis between them.