EGYPT’S current account deficit narrowed 13.6 per cent in the first half of the financial year 2025/2026 to reach $9.5 billion, new figures showed, reports the Arab News.
Data from the country’s central bank showed the improvement was driven by a 28.4pc rise in net unrequited current transfers, which reached $22bn between July and December.
This aligns with S&P Global’s decision earlier this week to affirm Egypt’s sovereign credit ratings at ‘B/B’ with a stable outlook, citing strong momentum in macroeconomic reforms and improved external buffers.
In its latest report, the credit rating agency stated that the affirmation reflects a balance between Egypt’s reform progress over the past two years, its external buffers, and its medium-term growth outlook, against heightened risks from prolonged regional geopolitical tensions.
“This increase was primarily driven by the surge in the remittances of Egyptians working abroad. In addition, the services balance rose by 20.6pc, recording a surplus of $8.9bn, supported by the growth in both tourism revenues and Suez Canal transit receipts,” the newly released statement said.
“On the other hand, the capital and financial account recorded a net inflow of $6.5bn during the period under review, as foreign direct investment in Egypt registered a net inflow of $9.3bn, mainly driven by the inflows during the period October/December 2025 due to the conclusion of the Alam El Roum deal valued at $3.5bn,” it added.
The data further showed that portfolio investments in Egypt posted a net inflow of $5bn from July to December compared to a net outflow of $3.2bn in the same period in 2024, while banks’ foreign assets abroad rose by $9.7bn.
The balance of payments recorded an overall deficit of $2.1bn during the first half of the financial year 2025/2026, widening from a deficit of $502.6 million.
The capital and financial account recorded a net inflow of $6.5bn during the reporting period, compared with a net inflow of $8.9bn during the same period of the previous financial year.
This was mainly attributed to FDI net inflow of $9.3bn in the period between July and December against $6bn in the corresponding period a year prior, a $5bn net inflow in portfolio investment against $3.2bn previously, and a net outflow of $9.7bn in the change in banks’ foreign assets.
The net inflow in the capital and financial account was also supported by lower external borrowing, as medium- and long-term loans and facilities recorded a net repayment of $380.7m in the first half of the 2025/2026 financial year, compared with $2bn in the same period a year earlier.
&uuid=(email))