Egypt’s current account deficit significantly decreased to $13.2 billion for the nine months ending March 2025, a notable improvement from the $17.1 billion recorded during the same period last year. Egypt’s central bank announced this positive development on Tuesday.

Key Factors Behind the Narrowed Deficit

The central bank attributed this reduction to several key factors:

• Soaring Remittances: A remarkable 86.6% surge in remittances from Egyptians working abroad played a crucial role. These inflows reached $26.4 billion, up from $14.5 billion previously.

• Boost in Services Surplus: The services surplus also saw a rise, primarily driven by a 23% increase in tourism revenue. Tourism earnings hit $12.5 billion from July 2024 to March 2025, compared to $10.9 billion in the prior year.

Challenges and Declines

Despite these positive trends, Egypt faced some headwinds:

• Oil Trade Imbalance: Oil exports fell by $430.5 million to $4.2 billion, while oil imports substantially increased by $4.8 billion to $14.5 billion. Egypt has been actively trying to import more fuel oil and liquefied natural gas (LNG) to address domestic power demands and prevent blackouts, a concern amplified by a drop in natural gas supply from Israel.

• Suez Canal Revenue Dip: Revenues from the Suez Canal declined sharply to $2.6 billion from $5.8 billion. This continued decline is due to ongoing attacks by Yemeni Houthis on ships in the Red Sea, impacting the vital global trade route.

• Reduced Foreign Direct Investment (FDI): FDI decreased to $9.8 billion, a significant drop from $23.7 billion in the previous period.