Egypt’s current account is still challenged by COVID-19 scars, high global commodity and shipping prices, and concerns over external competitiveness. Much of the changes in the country's external account in FY21 were driven by the normalization of trade patterns post the peak of COVID-19 shock, the relatively slower rebound in tourism, and the effect of economic recovery on imports bills. However, Q4 FY21 results showed a slower pace of deterioration in the current account deficit (CAD), after reaching its highest level since Q1 FY17 in Q3 FY21. CAD widened by 37% y/y to USD5.13bn in Q4 FY21 vs. USD3.82bn in Q4 FY20, albeit narrowing by 9.5% from USD5.67bn in Q3 FY21. Thus, overall CAD hit USD18.4bn in FY21 (4.6% of GDP), the highest deficit since FY16.
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Mona Bedeir
Chief Economist
T +202 3300 5722