Egypt’s Trade Deficit Expands by 17.8% Amid Export Decline and Import Volatility in December 2023

Egypt’s trade deficit experienced a significant increase of 17.8% in December 2023, underscoring a challenging economic landscape marked by a decline in export revenues and fluctuations in import volumes, according to data released by the Central Agency for Public Mobilization and Statistics. The deficit expanded to $3.03 billion from $2.57 billion in December 2022, reflecting broader economic pressures and shifts in global trade dynamics.

The detailed report from the agency shows a sharp 23% year-over-year decline in export values, which totaled $3.48 billion. This downturn was primarily driven by reduced valuations in key commodities. Notably, fertilizers, petroleum products, and natural and liquefied gases saw dramatic declines in their export values, dropping by 48.8%, 46.8%, and 88.1% respectively. The export of plastics in their primary forms also faced a significant reduction, with a 35.5% decrease in value. Despite these challenges, certain sectors demonstrated resilience and even growth in export revenues. Ready-made garments saw a substantial increase of 24.9%, while fresh fruits and crude oil exports grew by 3.6% and 60.2%, respectively. Additionally, the export sectors of pastries and various food preparations reported a growth of 5%.

On the import front, the total value decreased by 8.2% to $6.51 billion. This decrease was predominantly due to lower import costs of several key commodities. Imports of organic and inorganic chemicals, plastics in primary forms, soybeans, and wood and its products saw significant reductions, with decreases of 8.2%, 17.2%, 14.7%, and 40.5%, respectively. However, there were notable increases in other areas: petroleum products, raw materials of iron or steel, medicines and pharmaceutical preparations, and wheat imports rose by 24.7%, 80.2%, 5.8%, and 20.7% respectively.

The broader fiscal landscape in Egypt has also been a focus, with efforts to manage the budget deficit amid these trade challenges. Egypt’s Finance Minister Mohamed Maait, in a recent conference reported by Reuters, highlighted the country’s strategy to bolster its economy. He announced an anticipated rise in Egypt’s primary budget surplus to above 3.5% for the fiscal year beginning in July 2024. This surplus calculation excludes interest payments, which have historically consumed more than half of the government’s expenditures. In the first seven months of the fiscal year, these payments significantly contributed to maintaining a deep deficit. Last month, the finance ministry projected a primary general budget surplus of 2.5% of the GDP for the current fiscal year 2023/24. These fiscal measures include asset sales, such as real estate, and securing financial backing through a support package from the International Monetary Fund, illustrating Egypt’s proactive steps to improve its economic stability in the face of ongoing global financial challenges.