Egypt’s Suez Canal & Tourism Revenue Surge as Remittances Drop 26%
According to a report by the Central Bank of Egypt (CBE) on Tuesday, revenue from the Suez Canal and tourism in Egypt increased by 22.3% and 25.7 % during the first three quarters of the fiscal year (FY) 2022/2023. The Suez Canal generated $6.2 billion in revenue between July 2022 – March 2023, up from nearly $5 billion a year earlier. Meanwhile, tourism revenue rose to $10.3 billion during the same period, compared to $8.2 billion in the previous year, due to a 26.8% increase in the number of tourist nights and a 32% rise in tourist arrivals to Egypt.
Egypt has been working to revive its tourism industry, which is one of the country’s leading economic sectors, after the COVID-19 pandemic and the Russia-Ukraine conflict dealt significant blows. The government expects to achieve record revenues by the end of this fiscal year, following a record-breaking 1.35 million tourist arrivals in April.
However, the report also revealed that remittances from Egyptian expats dropped by over 26% to $17.5 billion in the first three quarters of FY 2022/2023, compared to $23.6 billion during the same quarters for the previous fiscal year. Remittances are a vital source of foreign currency for Egypt, which is already struggling with its foreign reserves. To attract more inflows into the country, the state-owned National Bank of Egypt (NBE) and Banque Misr are issuing two US dollar-denominated annual-yield certificates of deposit.
Another factor that hindered the improvement of the current account is the investment income payments that increased by $2.9 billion to $14.7 billion, up from $11.3 billion from the previous year. The report attributed this increase to interest payments on external debt and earnings on Foreign Direct Investment in Egypt. In June, the Suez Canal Authority (SCA) Chairman, Osama Rabie, announced that Suez Canal revenues had surged to $9.4 billion in FY 2022/23 from $7 billion in the previous year. The SCA is currently reviewing the canal’s transit tariffs and will announce in October whether there will be any increases, which would take effect in January 2024.
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