Egypt’s Trade Deficit Falls to Lowest Level in Decade

Egypt’s trade deficit declined to its lowest level in ten years, driven by a sharp rise in non-oil exports and a moderation in imports, according to official government data.

Between January and October 2025, Egypt’s trade deficit fell by 16% compared with the same period in 2024, said Hassan El-Khatib, Minister of Investment and Foreign Trade. The improvement marks a significant milestone for Africa’s most populous country as it seeks to strengthen external balances and boost export-led growth.

Data released by the Egyptian Cabinet showed that non-petroleum exports reached $40.7 billion during the first ten months of 2025, the highest level in a decade. This represents a 19% increase year-on-year, reflecting what officials described as improved production capacity and stronger competitiveness in foreign markets.

El-Khatib said Egypt also recorded its largest annual increase in exports, with shipments rising by more than $6.5 billion compared with the same period in 2024.

Total trade volume reached $107.6 billion during the January–October period, the highest in ten years, marking an 8% increase from a year earlier. The expansion was fueled by the strong growth in exports, alongside a 2% decline in imports, helping narrow the trade gap.

According to the minister, Egypt’s import structure increasingly reflects a production-oriented economy. Based on a three-year average (2023–2025), 93% of imports consist of production inputs, strategic goods, and essential commodities, rather than consumer products.

He added that customs incentives have helped lower production costs and enhance the global competitiveness of Egyptian-made goods, aligning with the government’s broader strategy to expand exports and attract foreign investment.

El-Khatib pointed to the evolution of Egypt’s trade balance between 2004 and 2024, noting that average exports stood at just $5.97 billion between 2004 and 2007. In 2008, exports surged by 91%, driven by higher investment levels and improved utilization of production capacity factors that helped reduce the trade deficit at the time.

“Increased investment and better use of production capacity remain the key drivers of export growth and trade expansion,” the minister said, adding that both are essential for sustaining improvements in the trade balance.

Egypt currently maintains free trade agreements with more than 100 countries, El-Khatib said, noting that these agreements have generated tangible economic returns, including higher exports and job creation, while the cost of trade exemptions has continued to decline.

Looking ahead, the government plans to deepen trade and investment ties through the activation of the SIFA agreement with the European Union, aimed at attracting long-term European investments. Egypt also seeks to implement investment agreements announced during the Egypt–EU Conference held in June 2024, as part of its strategy to reinforce export growth and economic stability.