Egypt/ Balance of payments Q3 FY20
CAD narrowed by 39% y/y in Q3 FY20, thanks to improved trade deficit and remittances. Egypt’s current account deficit shrank in Q3 FY20 to USD2.8bn, helped by a 10.9% y/y decrease in trade deficit and a 27.6% increase in workers’ remittances. We note that COVID-19 was only in full swing in the last month of Q3 FY20, when global and domestic lockdown measures and travel bans were first put in place. Thus, we expect the crisis to be apparent the most in Q4 FY20; current Q3 FY20 figures do not fully reflect the impact of the economic fallout of COVID-19 on the external balance. However, the effect of the pandemic turmoil in Q3 FY20 was quite substantial on tourism and the financial account; they both dragged the overall balance to fall into a deficit of USD5.5bn in Q3 FY20 vs. an overall surplus of USD1.4bn in Q3 FY19.
Mona Bedeir
Senior Economist
Tel.: +202 3300 5722