Egypt’s trade deficit narrows by 5.1% in June

RIYADH: Egypt’s trade deficit decreased by 5.1 percent in June, reaching $2.87 billion, due to falling prices for wheat and other commodities.

Data from the Central Agency for Public Mobilization and Statistics shows that imports fell by 3.3 percent to $6 billion during the month.

The decline in imports was primarily driven by reduced prices for key commodities: wheat prices dropped by 21.5 percent, medicines and pharmaceutical preparations by 11.9 percent, plastics by 4.2 percent, and corn by 28.6 percent. This follows a 10.3 percent decrease in trade deficit recorded in May, which was also attributed to lower import values.

Since 2004, Egypt has consistently run trade deficits, as import growth has outpaced export growth, largely due to increasing imports of petroleum and wheat, according to Trading Economics.

CAPMAS data also revealed some increases in imports in June compared to the same month in 2023, including a 49.8 percent rise in petroleum products, a 33.6 percent increase in raw materials of iron and steel, a 5.8 percent rise in organic and inorganic chemicals, and a 39.6 percent increase in natural gas.

Export values, however, fell by 1.6 percent year on year to $3.13 billion. This decrease was due to lower prices for commodities such as fertilizers (down 42.9 percent), crude oil (down 64.6 percent), iron rods, bars, angles, and wires (down 23.7 percent), and fresh onions (down 25.4 percent). Conversely, exports of petroleum products increased by 56.3 percent, ready-made clothes by 5.5 percent, fresh fruits by 24.3 percent, and pasta and various food preparations by 12.4 percent.

Egypt aims to revitalize its economy by enhancing exports across diverse global markets. This involves close collaboration between government bodies, the business community, and exporters to improve product quality and competitiveness. The country is targeting $100 billion in annual merchandise exports over the next three years to address its trade deficit.

The International Monetary Fund noted in August that Egypt’s economy is showing signs of recovery, with recent government measures to restore macroeconomic stability starting to yield positive outcomes. Although inflation remains high, it is decreasing.

The IMF’s review highlighted Egypt’s economic reforms, including the unification of official and parallel exchange rates in March, as key to maintaining fiscal stability.