Egypt’s external transactions showed a relative improvement during the first half of 2025/2026 (July-December 2025). The current account deficit thus decreased by 13.6% to reach $9.5 billion, compared to $10.9 billion a year earlier. At the same time, the capital and financial account recorded a net inflow of $6.5 billion, according to a statement from the Central Bank of Egypt, published on April 14, 2026.
This improvement is mainly explained by the significant increase of 28.4% in net current transfers, which reached $22.0 billion. This progress was largely driven by the sharp rise in remittances from Egyptians living abroad. Meanwhile, the services balance improved by 20.6%, showing a surplus of $8.9 billion thanks to the combined growth of tourism receipts and Suez Canal transit revenues.
On the financial side, the capital and financial account benefited from net inflows of $6.5 billion. Foreign direct investments reached $9.3 billion, supported by flows recorded between October and December 2025 under the Alam El-Roum agreement, amounting to $3.5 billion. Portfolio investments also rebounded, with net inflows of $5.0 billion, compared to a net outflow of $3.2 billion a year earlier. At the same time, foreign assets of banks increased by $9.7 billion.
Despite these positive developments, the balance of payments showed an overall deficit of $2.1 billion, compared to $502.6 million a year earlier.
The drivers of the current account improvement
Several factors contributed to the reduction of the current account deficit. Remittances from expatriate workers increased by 29.6% to a record level of $22.1 billion, compared to $17.1 billion previously. Tourism revenues rose by 17.3% to reach $10.2 billion, while Suez Canal revenues increased by 19.0% to $2.2 billion, supported by the increase in tonnage and the number of ships in transit.
Persistent trade imbalances
However, these performances were partially offset by the worsening of the trade deficit. The oil deficit widened by $2.3 billion to reach $8.9 billion, due to the increase in energy imports, which reached $11.6 billion. Meanwhile, oil exports fell to $2.6 billion, despite a slight increase in natural gas exports.
The non-oil trade deficit also increased, reaching $22.8 billion compared to $20.8 billion previously. This evolution reflects the increase in goods imports, particularly vehicles, corn, phones, and soybeans, despite a rise in non-oil exports to $18.3 billion, driven by gold, household appliances, agricultural products, and clothing.
Furthermore, the investment income deficit widened by 8.0% to reach $8.6 billion, due to the increase in investment income payments.
Financial flows dynamics
The capital and financial account was supported by net foreign direct investments of $9.3 billion, mainly in non-oil sectors. Investments in new projects and capital increases generated $6.1 billion, while real estate purchases by non-residents reached $1.0 billion and reinvested earnings amounted to $2.4 billion.
On the other hand, the oil and mining sector recorded a net outflow of $159.5 million, related to the repayment of exploration and development costs.
Finally, the decrease in external borrowing resulted in a net repayment of $380.7 million on medium and long-term loans, illustrating a reduced dependence on external financing.
