Egypt’s Trade Deficit Surges in December
In a surprising turn of events, Egypt’s annual trade deficit soared by 17.8 percent in December, largely due to a decrease in the value of crucial commodities like fertilizers and petroleum products.
Key Findings
According to the latest report from the Central Agency for Public Mobilization and Statistics, Egypt recorded a trade deficit of $3.03 billion in December 2023, marking a significant increase from $2.57 billion in the same month of the previous year. The report also highlighted a 23 percent year-on-year decline in export value, totaling $3.48 billion, while imports decreased by 8.2 percent to reach $6.51 billion.
Reasons Behind the Decline
The decrease in exports can be attributed to a substantial reduction in the value of specific commodities, including a 48.8 percent drop in fertilizers, a 46.8 percent decrease in petroleum products, and an 88.1 percent plunge in natural and liquefied gas. Additionally, plastics in their primary forms also experienced a 35.5 percent fall in export value during the period.
Positive Trends Amidst Challenges
Despite these setbacks, some commodities saw an increase in export revenue during the same period compared to the previous year. Ready-made clothes recorded a 24.9 percent rise, fresh fruits increased by 3.6 percent, and crude oil witnessed a growth of 60.2 percent. Moreover, pastries and various food preparations also saw a 5 percent growth.
Import Dynamics
The decline in import value was primarily driven by a decrease in the value of certain commodities, such as organic and inorganic chemicals, plastics in their primary forms, soybeans, and wood and its products. However, imports of petroleum products, raw materials of iron or steel, medicines and pharmaceutical preparations, and wheat saw an uptick during the month compared to the same period in 2022.
Financial Progress and Outlook
On a positive note, Egypt has been making significant strides in reducing its budget deficit by selling real estate and securing a support package with the International Monetary Fund. Finance Minister Mohamed Maait announced that Egypt’s primary budget surplus is expected to rise to above 3.5 percent in the upcoming fiscal year, starting in July. This surplus does not include interest payments, which have been a significant contributor to Egypt’s deficit. The finance ministry projects a primary general budget surplus equal to 2.5 percent of GDP for the current fiscal year.