Egypt Sees Revenue Growth in Suez Canal and Tourism Amid Decreased Remittances

Egypt experienced a robust surge in Suez Canal and tourism revenues during the first three-quarters of fiscal year (FY) 2022/2023, according to recent data released by the Central Bank of Egypt (CBE). Despite these strong figures, the North African nation also experienced a significant drop in remittances from overseas workers during the same period.

Data shows that the Suez Canal, a key global shipping route, delivered revenues amounting to $6.2 billion, a rise of 22.3% compared to the same period the previous year, which stood at around $5 billion. The chairman of the Suez Canal Authority (SCA), Osama Rabie, anticipates that the Canal's total earnings for the fiscal year would reach $9.4 billion, up from $7 billion in FY 2021/22. The SCA is also examining the potential adjustment of canal transit fees, with any amendments expected to take effect from January 2024.

Tourism, a vital pillar of Egypt's economy, also demonstrated significant growth. The sector experienced a 25.7% increase in revenues, amassing $10.3 billion, versus $8.2 billion in the same timeframe a year earlier. This growth was driven by a 26.8% surge in tourist nights and a 32% rise in tourist arrivals, with a record total of 10 million visitors. The Egyptian government remains optimistic about future revenue growth, given that it recorded a record-breaking 1.35 million tourists in April alone.

However, not all sectors showed positive trends. Remittances from Egyptians working abroad fell sharply, dropping 26.1% to reach $17.5 billion, down from $23.6 billion. This is of concern as remittances are a significant source of foreign currency for Egypt, a nation already under pressure to maintain its foreign reserves. To address this issue, Egypt's National Bank and Banque Misr are issuing US dollar-denominated annual-yield certificates of deposit (CDs), aiming to stimulate further capital inflows.

Another aspect impacting Egypt's financial health is the rise in investment income payments, which surged by $2.9 billion to $14.7 billion due to higher interest payments on external debt and returns on Foreign Direct Investment (FDI) in Egypt.

Lastly, the report mentioned Egypt's trade deficit reduction by 29.8% to $23.6 billion. The country's petroleum exports slightly dropped, while imports slightly increased, impacting the overall trade balance. Encouragingly, FDI in Egypt grew, including increased investments in both oil and non-oil sectors.

With mixed results in different sectors, Egypt continues to show resilience, with hopes of further economic recovery as it manages the impacts of the pandemic and international conflicts.