The document analyzes Egypt's balance of payments trends in 2017-2018. It notes that Egypt's current account balance sharply narrowed, indicating reduced external financing needs. While tourism revenues are returning to pre-2011 levels, further growth may be limited. Remittances from Egyptian workers abroad surged despite concerns about lower Gulf economic growth. Foreign direct investment is increasing but remains small compared to GDP, with most going to the hydrocarbon sector. Portfolio investment, particularly in Egyptian treasury bills, contracted in late 2017, implications higher domestic interest rates in the first half of 2018.

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Egypt BoP Update
April 2018

2. Chart #1: sharp narrowing in C/A balance indicates drop in external financing requirements
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Q109 Q309 Q110 Q310 Q111 Q311 Q112 Q312 Q113 Q313 Q114 Q314 Q115 Q315 Q116 Q316 Q117 Q317
Current Account Balance, USDbn
An adjustment only
a devaluation could
produce

3. Chart #2: net oil trade balance is still a marginal factor in the current account
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Q109 Q309 Q110 Q310 Q111 Q311 Q112 Q312 Q113 Q313 Q114 Q314 Q115 Q315 Q116 Q316 Q117 Q317
Net Oil Trade Balance, USDbn Net Non-Oil Goods Trade Balance, USDbn

4. Chart #3: tourism revenues are returning to trend, and should continue to grow in 2018
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Q109 Q309 Q110 Q310 Q111 Q311 Q112 Q312 Q113 Q313 Q114 Q314 Q115 Q315 Q116 Q316 Q117 Q317
Net Travel Receipts, USDbn
Tourism revenues are expanding
but upside might be limited

5. Chart #4: measured by size of FX inflows, Egypt’s most import export is people
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Q109 Q309 Q110 Q310 Q111 Q311 Q112 Q312 Q113 Q313 Q114 Q314 Q115 Q315 Q116 Q316 Q117 Q317
Current Transfers, USDbn
Remittances surge despite fears over
lower non-oil growth in GCC

6. Chart #5: FDI is picking up, but remains small (particularly non-hydrocarbon FDI) relative to GDP
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Q109 Q309 Q110 Q310 Q111 Q311 Q112 Q312 Q113 Q313 Q114 Q314 Q115 Q315 Q116 Q316 Q117 Q317
FDI in Egypt, USDbn

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Q109 Q309 Q110 Q310 Q111 Q311 Q112 Q312 Q113 Q313 Q114 Q314 Q115 Q315 Q116 Q316 Q117 Q317
Foreign investment into Egyptian
securities shrinks in Q4 2017
Portfolio Investment in Egypt, USDbn
Chart #6: the slowdown in t-bill investment appears to have started, with implications for rates in H1