Egypt's trade deficit sees 5.1 percent reduction in June

(MENAFN) Egypt's trade deficit saw a 5.1 percent reduction in June, narrowing to USD2.87 billion, primarily due to a drop in the prices of key commodities such as wheat and other goods. According to data from the Central Agency for Public Mobilization and Statistics (CAPMAS), imports for the month fell by 3.3 percent, reaching USD6 billion. This decline was largely driven by significant price reductions in essential commodities, including a 21.5 percent decrease in wheat prices, an 11.9 percent drop in medicine and pharmaceutical preparations, a 4.2 percent reduction in plastics, and a 28.6 percent fall in corn prices. The reduction follows a similar trend from May, where the trade deficit had shrunk by 10.3 percent due to lower import values.

The trend of running consistent trade deficits in Egypt dates back to 2004, as the country's import growth has typically outpaced export growth, particularly driven by rising imports of petroleum and wheat. While the overall decline in imports contributed to the trade deficit reduction, CAPMAS data also highlighted a few areas where imports surged in June compared to the same period in 2023. These included a 49.8 percent increase in petroleum product imports, a 33.6 percent rise in raw materials of iron and steel, a 5.8 percent increase in organic and inorganic chemicals, and a significant 39.6 percent rise in natural gas imports.

On the export side, Egypt experienced a 1.6 percent year-on-year decline in June, with the total export value falling to USD3.13 billion. This decline was attributed to reduced prices for several commodities, including a 42.9 percent drop in fertilizer prices, a 64.6 percent fall in crude oil, a 23.7 percent decrease in iron rods, bars, angles, and wires, and a 25.4 percent drop in fresh onion exports. However, certain sectors experienced growth, with petroleum product exports increasing by 56.3 percent, ready-made clothing exports rising by 5.5 percent, fresh fruits seeing a 24.3 percent increase, and pasta and food preparation exports growing by 12.4 percent.

To address the ongoing trade deficit, Egypt is focusing on revitalizing its economy by expanding its export reach to diverse global markets. The country is working closely with government agencies, the business community, and exporters to improve the quality and competitiveness of its products. As part of its long-term strategy, Egypt aims to achieve USD100 billion in annual merchandise exports over the next three years, a goal designed to significantly reduce its trade deficit and boost economic growth.

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