Egypt’s balance of payment (BOP) recorded a deficit of USD3.47bn in 4Q19/20, reversing a surplus of USD0.25bn a year earlier, with the current account deficit widening to USD3.83bn in 4Q19/20 from a deficit of USD1.09bn a year earlier, data from the Central Bank of Egypt (CBE) showed. The trade balance deficit slightly widened to USD8.41bn from a deficit of USD8.29bn in 4Q18/19. Egypt’s travel receipts fell c90% y-o-y to USD0.31bn leading to a total services balance surplus of USD0.55bn, down from a surplus of USD3.28bn in 4Q19/18. Worker remittances also declined c11% y-o-y to USD6.16bn, and FDI also fell c11% y-o-y to USD1.52bn. Portfolio inflows in Egypt amounted to USD0.64bn in 4Q19/20, of which net bond inflows amounted to USD3.74bn, offsetting the outflows from the shorter-term portfolio investments, the data showed. (CBE)
HC’s comment: The impact of the coronavirus on Egypt’s external position came in largely as expected, with the exception of the trade balance deficit which came in significantly wider than our estimate of USD5.59bn, as imports of non-petroleum products remained flat y-o-y at USD13.02bn, c36% above our estimate of USD8.38bn. The services balance came in better than our estimated deficit of USD0.79bn due to lower than expected services payments. Worker remittances came in c5% above our estimate of USD5.85bn. The current account balance figure was largely in line with our estimate of USD4.25bn. FDIs came in largely in line with our estimate of USD1.03bn.