Egypt's transactions with the world slip to a $9.8 billion deficit for the 2010-2011 fiscal year, in sharp contrast to the $3.4 billion surplus the previous year, central bank figures show Egypt's Balance of Payments (BoP), which shows international transactions in goods, services and money, registered a record deficit of US$9.8 billion in the year ending in June 2011, according to figures from the Central Bank of Egypt (CBE). The revolution year shows a shift from a BoP surplus of $3.4 billion in 2009-2010, to a deficit that's almost triple the level it reached druing the world economic crisis of 2009. The deficit is mainly due to a net outflow of money of $4.8 billion. Last year, Egypt saw a $8.3 million net inflow of foreign exchange, according to a CBE press release sent by e-mail. The deficit is mainly linked to the revolution period, as the BOP realised a surplus of $571.7 billion during the first half of the fiscal year from 1 July to the end of December 2010. Capital and financial accounts took the biggest hit, followed by services. On the other hand, the trade balance deficit improved due to a growth of exports and money transfers increased due to remittances from Egyptian expatriates. Foreign portfolio investment saw an outflow of $7.9 billion, 77 per cent of it as foreign sales of Egyptian treasury bills. Foreign Direct Investment (FDI) also dipped into the red for the first time with an outflow of $65 million, in contrast to net inflow of LE2.3 billion in the first half of the fiscal year. Egypt is characterised by a permanent trade deficit, but manages to cover its foreign exchange needs due to tourism and Suez Canal receipts, in addition to remittances from expatriates and, to a lesser extent, foreign direct investment.
