CAIRO: Egypt’s balance of payments swung into a deficit of $6.1 billion in the first quarter as revenue from tourism and foreign investment were hit by political turmoil in Egypt and the region, the central bank said on Monday.
The popular uprising that ousted president Hosni Mubarak from power in February scared off tourists and investors, two of Egypt’s main sources of foreign exchange.
The balance was "affected by the repercussions of the events Egypt and the Arabic region are passing through, which have negatively affected revenue from tourism and foreign investments," the central bank said in an emailed statement.
Egypt’s balance of payments in the first quarter fell into a deficit of $6.1 billion, the bank said.
According to Reuters’ calculations, the balance of payments in the first quarter of 2010 showed a surplus of $455 million.
Egypt’s financial year begins on July 1. Reuters made its calculation by subtracting the central bank’s first-half figures from its nine-month figures.
Finance Minister Samir Radwan said on Monday that Egypt anticipated a balance of payments deficit of $2 billion in the April-June quarter and $10 billion in fiscal 2011/12, which begins on July 1.
Tourism and remittances
Tourism revenue plunged to $1.79 billion in the first quarter from $2.72 billion a year earlier. Tourism revenue was mainly affected in February and March, when it plunged 60 percent year on year, the central bank statement said.
Private transfers into Egypt, made up largely of remittances by Egyptians working abroad, dipped to $2.77 billion from $2.82 billion in the first quarter of 2010, according to Reuters’ calculations.
Foreign direct investment was a negative $164 million in the first quarter, compared to a surplus of $4.33 billion a year earlier.
Net portfolio investment into Egypt swung into a $5.54 billion deficit from a $5.45 billion surplus as foreign investors liquidated treasury bill holdings after the protests against Mubarak erupted on Jan. 25.
The current account surplus narrowed to $999 million from $2.61 billion in the January-to-March quarter of 2010, according to a Reuters calculation using central bank figures.
