Egyptian Expat Remittances in May Announced by CBE

Remittances from Egyptians living abroad have continued their upward trajectory for the third consecutive month, rising by 26.6% to reach US$2.7 billion in May. According to data from the Central Bank of Egypt, this marks a year-on-year growth of 73.8%, up from US$1.6 billion.

Additionally, the monthly increase from April’s figure reached US$2.2 billion, driven by economic reform measures introduced on March 6, including a currency devaluation of approximately 35% in response to a significant interest rate hike.

This came as the International Monetary Fund projected Egypt’s foreign cash revenues to surge by US$13.7 billion from five key sources this year, marking a 14.6% increase from the previous year. Net private transfers from abroad are anticipated to increase to around US$23.1 billion in 2023-2024, up 5.5% from US$21.9 billion in 2022-2023. The projections suggest these transfers will continue rising to US$24.6 billion in 2024-2025.

This anticipated growth is largely attributed to a landmark agreement signed in February by the UAE, represented by a private consortium led by ADQ, a sovereign investment fund based in Abu Dhabi. The agreement outlined a US$35 billion investment in Ras El-Hekma, a region on the Mediterranean coast 350 km northwest of Cairo, marking the single largest foreign direct investment in Egypt to date.

The IMF forecasted in May that foreign cash inflows from these five sources, including proceeds from commodity exports, tourism revenues, Suez Canal revenues, private transfers, and net foreign direct investment, will total around US$107.3 billion for the fiscal year 2023-2024, up from approximately US$93.6 billion in 2022-2023. Despite this positive outlook for the current fiscal year, the IMF expected a decline in foreign cash inflows for the next fiscal year, projecting a drop to approximately US$91.2 billion, below the levels of 2022-2023.

Specifically, the international firm predicted a decrease in commodity export revenues to US$33.2 billion for the current fiscal year, down from US$39.6 billion last year, a 16.2% decline, with a subsequent rise to US$35.6 billion next year.

Tourism revenues are expected to fall to around US$12 billion in 2023-2024, down from US$13.6 billion in 2022-2023, an 11.8% decrease, before increasing to about US$12.6 billion in 2024-2025. Suez Canal revenues are projected to decline to US$6.8 billion this fiscal year, compared to US$8.8 billion last year, a 22.7% decrease, with an expected rise to approximately US$10 billion next year.

Net foreign direct investment inflows are projected to surge to around US$32.2 billion this year, a significant increase from US$9.7 billion in the previous fiscal year, marking a 232% rise. However, a decline to US$8.4 billion is expected next year.