Egypt’s economy dealt another blow

Current account and balance of payments deficits rose significantly in last financial year

Investor confidence in Egypt’s troubled economy has been dealt another blow, with central bank data revealing the country’s balance of payments deficit rose to $11.3 billion in the 2011-12 financial year, up 14 per cent year-on-year.

Preliminary figures show the country’s current account deficit rose 23 per cent year-on-year to $7.9bn, while its trade deficit increased by $4.6bn to $31.7bn.

Foreign investors have fled Egypt in the wake of Hosni Mubarak’s ousting in February 2011. Despite the election of Islamist president Mohamed Mursi in June, political instability has continued to impact the economy.

In a bid to restore confidence and kickstart its economy, the government has requested a $4.8bn loan from the Washington-headquartered IMF. Egypt has already received $2bn and $1bn cash injections from Qatar and Saudi Arabia respectively.

12 September 2012, 7:17 GMT | By Aaron Greenwood