The Balance of Payments (BOP) achieved an overall surplus of $12.8bn, and a drop in the current account deficit by 58.6% during the Fiscal Year (FY) 2017-2018. In FY 2017-2018, the current account deficit decreased by $8.4bn to reach $6bn down from $14.4bn in the previous in FY 2016-2017. According to a recent report by the Central Bank of Egypt (CBE), the improvement reflects the continued positive impact of the currency liberalisation decision, as both the services' surplus rose by 98.1% and the net current transfers rose by 21.2%, while the trade deficit stabilised at $37.3bn. The CBE added that the capital and financial account unfolded a net inflow of $22bn compared with $31bn a year earlier. These developments were reflected in an overall BOP surplus of $12.8bn in FY 2017-2018. The services balance and net unrequited current transfers are the key drivers of the improvement in the current account, the CBE explained. Furthermore, the services' surplus doubled to $11.1bn from $5.6bn, as a result to the surge in travel balance which rose to $7.4bn up from $1.6bn, while Suez Canal revenues increased by 15.4%, to register at $5.7bn compared to $4.9bn. Net unrequited current transfers scaled up by 21.2% to $ 26.5 versus $21.8bn, led by the increase in workers' remittances by $4.6bn. Moreover, the CBE said that the trade deficit stabilised at $37.3bn, due to the increase in both export proceeds and import payments by $4.1bn each. Merchandise exports increased by 18.9% to reach $25.8bn, increasing from $21.7bn in FY 2016-2017, owing to the rise in oil exports by 33.1% to $8.8bn, down from $6.6bn, affected by the surge in global crude oil, and oil products prices. Non-oil exports also increased by 12.7% to $17.1bn from $15.1bn, primarily due to the rise of $1.3bn in exports of finished goods. According to the CBE, increases were largely manifested in exports of electric appliances, phosphate fertilisers, ethylene, and propylene polymers. Meanwhile, merchandise imports went up by 6.9% to $63.1bn from $59bn, on the back of the increase in oil imports by 3.9%, to register at $12.5bn against $12bn, influenced by the rise in global oil prices. However, this rise was mitigated by the decline in the exported quantities of natural gas. Non-oil imports also increased by 7.7% to $50.6bn from $47bn, largely because of the increase in the imports of intermediate goods required for production. Furthermore, the CBE explained that these indicators and facts have positivity affected the capital and financial account since the withdrawal of foreign investors from the emerging markets, registering a net inflow of $22bn. Total Foreign Direct Investment (FDI) inflows in Egypt recorded $13.2bn, while total outflows reached $5.4bn. Accordantly, net FDI in Egypt adjusted to $7.7bn, mainly due to the net investments of $4.5bn in the oil sector. Portfolio investment in Egypt retreated, registering a net inflow of $12.1bn, as a result to the decrease in foreigners' investments in Egyptian treasury bills, recording net purchases of $6.5bn down from $10bn in the previous year. Furthermore, medium- and long-term loans and facilities registered a net disbursement of $7.9bn, while the net change in the CBE's liabilities to the external world reversed to a net external repayment of $3.9bn, from a net disbursement of $8.1bn.
