Egypt’s balance of payments (BoP) deficit showed a slight improvement, decreasing by 2.9% to $1.8 billion during the first nine months of the fiscal year (FY) 2025/26. This is an improvement from the $1.9 billion recorded in the same period the previous year, largely driven by a rise in foreign direct investment (FDI), growth in remittances from workers abroad, and increased revenues from tourism and the Suez Canal, as reported by the Central Bank of Egypt (CBE).
Capital and Financial Account Performance
The capital and financial account experienced net inflows of $9.9 billion for the period from July to March, a significant rise from $7.7 billion reported a year earlier. This boost was primarily attributed to a strong increase in FDI, despite facing substantial portfolio investment outflows due to heightened geopolitical instability in the region. Egypt saw net FDI inflows climb to $13 billion compared to $9.8 billion from the same timeframe in FY 2024/25, with $3.5 billion flowing in during the October to December 2025 period, attributed to the Alam El-Roum investment deal.
However, the portfolio investments faced a downturn, recording a net outflow of $4.4 billion, a contrast to the net inflows of $2.1 billion in the previous year. This dramatic shift was underlined by outflows totaling $9.5 billion during the January to March 2026 timeframe, coinciding with escalating conflicts in the Middle East.
Current Account Deficit Overview
Despite the overall narrowing of the BoP deficit, Egypt’s current account deficit expanded to $14.6 billion, primarily due to a significant increase in the merchandise trade deficit, which rose by 24.6% to $47.8 billion. The widening was predominantly driven by a growing non-oil trade deficit, which surged by $6.7 billion, or 23.8%, to reach $34.7 billion, attributed to non-oil imports growing faster than exports. Non-oil imports rose by 15.6% to $61.9 billion, reflecting an uptick in essential intermediate goods that are fundamental for domestic production and economic progression.
Interestingly, non-oil exports also saw an increase, climbing 6.6% to $27.3 billion. This growth was bolstered by stronger shipments of agricultural products such as fresh and dried fruits, as well as household electrical appliances and garments.
Impact of External Factors on Revenues
Despite the broader current account deficit, several external revenue sources provided support. Remittances from Egyptians living abroad saw a remarkable increase of 32%, amounting to $34.9 billion, compared to $26.4 billion in the prior fiscal year. Simultaneously, tourism revenues grew by 14.9%, totaling $14.4 billion, while Suez Canal receipts increased by 22.1% to $3.2 billion, driven by the resurgence in shipping activity. Notably, net tonnage surged by 18.5% to 426.9 million tons, coupled with a 7.6% rise in the number of vessels crossing the canal.
Within the capital and financial account, FDI directed toward non-oil sectors achieved a net inflow of $13.5 billion. New investments and capital increases in existing entities generated net inflows of $7.2 billion, while reinvested earnings rose to $4.5 billion.
In the oil and mineral sectors, however, a contrasting scenario unfolded; FDI recorded a net outflow of $482.4 million due to diminished greenfield investments by foreign energy entities and increased cost recovery payments.
In summary, Egypt’s balance of payments dynamics present a mixed picture, with substantial inflows from FDI and remittances offering resilience against the backdrop of an expanding current account deficit. The CBE’s assessment highlights the ongoing strengths and weaknesses impacting Egypt’s economic landscape.