Egypt Current Account Deficit Hits US$22.5 Billion

ECONOMY · EGYPT

The Egypt current account deficit widened to US$22.5 billion in the fiscal year to June 2026, the Central Bank of Egypt said on Monday 12 October. That is up from US$15.4 billion a year earlier, a rise of about 46%, driven by heavier imports and larger payments to foreign investors.

For foreign investors the headline gap is only half the story, because strong capital inflows still left an overall balance of payments surplus of US$2.8 billion. That reverses a US$2.1 billion deficit the year before, according to the central bank, Egypt’s monetary authority and manager of its foreign reserves.

Imports and Investor Payouts Drove the Gap

The merchandise trade deficit grew 27.1% to US$64.8 billion, up from US$51 billion, as reported by Masrawy and the Federation of Egyptian Banks. Non-oil imports rose 16.9% to US$83.9 billion, while non-oil exports increased only 7.8% to US$37.3 billion.

Energy added to the strain, with the oil trade deficit up 31.5% to US$18.3 billion. Daily News Egypt reported that the central bank linked this to higher imports of natural gas and crude oil.

Egypt now buys more gas abroad because domestic output no longer covers local consumption. Oil imports rose 27.6% to US$24.9 billion, while oil exports increased 18.1% to US$6.6 billion.

The second driver was the investment income deficit, which measures interest and profits paid abroad minus those received. It widened 33.8% to US$21.2 billion, the central bank figures reported by Masrawy show.

Remittances, Tourism and the Canal Softened the Blow

Money sent home by Egyptians working abroad jumped 29.6% to US$47.3 billion, from US$36.5 billion, the central bank figures show. Remittances are now Egypt’s largest single source of foreign currency, well ahead of tourism or the Suez Canal.

Tourism revenue rose 10.3% to US$18.4 billion, helping lift the services surplus by 10.5% to US$16.7 billion. Suez Canal receipts climbed 21.6% to US$4.4 billion, on a 22.4% rise in net tonnage and 9.8% more ships.

The canal is recovering, but its earnings remain far below levels seen before attacks on Red Sea shipping diverted traffic around Africa. Recent coverage includes Suez Canal Revenue Still Far Below Peak, Egypt Says.

Foreign Capital Closed the Gap

Net inflows into the capital and financial account rose to US$23.2 billion, from US$10.2 billion, which more than covered the current account shortfall. Net foreign direct investment reached US$18 billion against US$12.2 billion, with non-oil sectors taking US$17.8 billion.

Greenfield projects and capital increases contributed US$8.8 billion, including US$3.5 billion from the Alam Al-Roum deal between October and December 2025. Reinvested earnings added US$6.2 billion, while non-residents bought Egyptian property worth a net US$2.8 billion.

Portfolio investment, which includes foreign purchases of Egyptian debt and shares, brought a net inflow of US$4.2 billion compared with US$1.6 billion. Medium and long-term loans showed net disbursements of US$1.9 billion, after net repayments of US$3.5 billion the year before.

The reserve build that followed has been visible in monthly figures, covered in Egypt’s Reserves Hit Record US$57.35 Billion. Banks also moved more money abroad, with net outflows from their foreign assets reaching US$9.7 billion against US$5.6 billion, Daily News Egypt reported.

What It Means for US Readers

For US funds holding Egyptian dollar bonds or local Treasury bills, the data show a country still covering a large external gap with foreign money. That works while investors stay confident, but a sudden pullback could again pressure the pound and reserves.

The stabiliser is that much of the inflow came from direct investment and remittances, which tend to be steadier than bond flows. Egypt also matters to US shipping and energy markets, as a larger gas importer and the operator of a key global trade route.

US companies selling machinery, grain or energy into Egypt could benefit from stronger import demand, provided the foreign-exchange market stays liquid. Readers following prices and rates can compare with Egypt Inflation Eases to 14.5%, but Rate Cuts Wait.

What Is Not Known

The local reports of the release do not give a full quarter-by-quarter split, so the trend within the year is not confirmed. It is also unclear how much of the US$4.2 billion portfolio inflow sits in short-term Treasury bills that could leave quickly.

Officials have not said how long gas imports will stay at current levels, or how fast new domestic production can replace them. Whether large property deals such as Alam Al-Roum will be repeated in the current fiscal year is also open.

Frequently Asked Questions

How big is the Egypt current account deficit?

The Central Bank of Egypt put it at US$22.5 billion for the fiscal year from July 2025 to June 2026, up from US$15.4 billion a year earlier.

Why did the deficit widen?

The trade deficit rose 27.1% to US$64.8 billion on higher imports, including natural gas and crude oil, and the investment income deficit grew 33.8% to US$21.2 billion.

Did Egypt still have a balance of payments surplus?

Yes. Strong foreign direct investment of US$18 billion and portfolio inflows of US$4.2 billion produced an overall surplus of US$2.8 billion.

How much did remittances bring in?

Remittances from Egyptians abroad rose 29.6% to US$47.3 billion, the largest single source of foreign currency for the country.

Why should US investors care?

Egypt relies on foreign capital to cover its external gap, so the data shape the risk on Egyptian bonds and Treasury bills held by US funds.

Sources: Central Bank of Egypt balance of payments release for FY2025/26 (12 October 2026), as reported by Federation of Egyptian Banks, Daily News Egypt, Masrawy and Al Manassa.

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief