Egypt's Current Account Gap Doubles to $5.1B as Trade Deficit Widens, While FX Inflows Remain Resilient

Egypt's current account deficit widened to US$5.1 billion in Q1 2026 (January–March), more than double the US$2.3 billion recorded a year earlier, according to Central Bank of Egypt data. The increase was primarily driven by a wider merchandise trade deficit, with oil imports reaching US$5.7 billion compared with US$1.6 billion in oil exports.

Areas of improvement:

1. Remittances: US$12.8 billion, up 38% year-on-year.
2. Tourism revenue: US$4.2 billion, compared with US$3.8 billion a year earlier.
3. Suez Canal receipts: US$1.0 billion, up from US$800 million.
4. Foreign direct investment (FDI): US$3.7 billion, broadly unchanged from a year earlier.

Suez Canal recovery: Canal revenue declined significantly during the 2024 Houthi-related disruptions but has gradually recovered since the October 2025 Gaza ceasefire. Monthly vessel transits reached multi-year highs by early 2026, although traffic volumes remain below 2023 levels.

Broader economic context: Despite the wider current account deficit, the Egyptian pound remained relatively stable near EGP 54 per U.S. dollar through Q1 and Q2 2026. The currency has been supported by an US$8 billion IMF program, elevated domestic interest rates of around 21–22%, and foreign exchange reserves of approximately US$53 billion as of April. The IMF's combined Fifth and Sixth Review, completed in February, reaffirmed the country's exchange-rate flexibility framework and reserve position.

Looking ahead, market participants are expected to continue monitoring developments in remittance, tourism and trade flows alongside broader external financing conditions during the second half of 2026.

Sources: Central Bank of Egypt, IMF Country Report 2026/069, Reuters