With imports up and exports down, Egypt’s trade deficit widened to LE24.6 billion in April, up 52.7 percent compared to the same month last year.
State statistics agency CAPMAS attributes the decline in export values to lower prices for goods, including crude oil and textiles. Meanwhile, CAPMAS says, higher prices for goods like cars and refined petroleum products drove up the import bill.
The news comes at a time when global commodity prices are in steady decline, including prices for fuel, wheat and other key items Egypt imports.
Economists, including Central Bank of Egypt Governor Hesham Ramez, have suggested a strong Egyptian pound is partly responsible for Egypt’s lack of competitiveness in the export market.
The pound has been allowed to devalue twice in 2015 — from LE7.14 to the US dollar to LE7.53 to the dollar in late January and early February, and again to LE7.73 to the dollar in early July — its value is still roughly pegged to the US dollar.
With the dollar on the rise, the pound has often outperformed currencies such as the Euro, making Egyptian goods and services more expensive in the Eurozone and other global markets. The European Union is Egypt’s largest trading partner.
Egypt’s trade deficit has driven a balance of payments deficit that hit US$1 billion for the first half of the 2014/15 Fiscal Year.