Trade deficit increases as declining exports and decreased imports impact overall trade balance.
Egypt witnessed a significant increase in its trade deficit during April 2023, with exports experiencing a sharp decline while imports faced a notable decrease. The Central Agency for Public Mobilization and Statistics (CAPMAS) reports a 23.8% rise in the trade deficit compared to the same month in the previous year.
Decreased exports impact Egypt’s trade deficit
Egypt’s exports recorded a substantial decline of 44.9%, amounting to USD 3.03 billion in April 2023, in contrast to USD 5.50 billion during the same period last year. This downturn can be attributed to a decrease in the value of various commodities, including a significant drop of 75.6% in natural gas, 58.8% in fruits, 48.2% in crude oil, and 34.1% in ready-made clothes, according to CAPMAS.
However, it’s worth noting that certain commodities experienced an increase in export value during April 2023 compared to the same month in the previous year. Notably, wires of iron saw a remarkable surge of 568.8%, pasta and various food stuffs rose by 35.6%, onion exports increased by 65.8%, and dairy products witnessed a modest growth of 1.4%.
Decreased imports reflect shifting trade patterns
In April 2023, Egypt observed a decline of 27.4% in the value of imports, reaching USD 5.36 billion compared to USD 7.38 billion in the same month the previous year. This reduction can be attributed to the decreased value of specific commodities, including a 1.4% decline in wheat, 2.1% in chemicals, 33.6% in plastics in their primary forms, and 52.4% in the raw materials of iron and steel.
Nevertheless, imports of certain commodities exhibited an upward trend in April 2023 compared to the same month in the previous year. Notably, petroleum products experienced a growth of 13.8%, corn imports surged by 61.3%, natural gas increased by 16.6%, and iron ores and concentrates saw a modest rise of 5.2%.
Impact on Egypt’s trade dynamics
The notable increase in Egypt’s trade deficit during April 2023 highlights the significance of export and import patterns in the country. While declining exports, particularly in key sectors such as natural gas, fruits, crude oil, and ready-made clothes, have contributed to the overall trade imbalance, there have been positive developments in the export of wires of iron, pasta, onion, and dairy products.
Similarly, the decrease in import value, mainly driven by reduced imports of wheat, chemicals, plastics, and the raw materials of iron and steel, has impacted the trade dynamic. However, the import growth of petroleum products, corn, natural gas, and iron ores and concentrates signifies evolving trends in Egypt’s import landscape.
As Egypt navigates these shifts in trade patterns, it will be crucial for stakeholders to closely monitor and strategize to address the challenges and seize the opportunities that emerge in the dynamic global marketplace.