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Egypt’s Trade Balance Deficit Drops 12.4%

The value of Egypt’s trade balance deficit reached $3.21 billion in June, down from $3.66 billion for the same month of the previous year. (Asharq Al-Awsat)
The value of Egypt’s trade balance deficit reached $3.21 billion in June, down from $3.66 billion for the same month of the previous year. (Asharq Al-Awsat)
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Egypt’s Trade Balance Deficit Drops 12.4%

The value of Egypt’s trade balance deficit reached $3.21 billion in June, down from $3.66 billion for the same month of the previous year. (Asharq Al-Awsat)
The value of Egypt’s trade balance deficit reached $3.21 billion in June, down from $3.66 billion for the same month of the previous year. (Asharq Al-Awsat)

Egypt’s trade deficit declined by 12.4% year-on-year (YoY) in June, according to data released on Monday by the Central Agency for Public Mobilization and Statistics (CAPMAS).

The monthly bulletin revealed that the deficit value of trade balance reached $3.21 billion in June, down from $3.66 billion for the same month of the previous year.

The country’s exports dropped by 3.3% YoY in June to $3.75, versus $3.88 billion for the same month of the previous year.

The value of imports also decreased by 7.7 % to $6.96 billion during June 2022, versus $7.54 billion in June 2021.

Separately, the European Bank for Reconstruction and Development’s (EBRD) Managing Director for the Southern and Eastern Mediterranean, Heike Harmgart, said that bank will help finance the decommissioning of 5GW of inefficient gas-fired power plants in Egypt from 2023 while pledging up to $1 billion for renewables.

EBRD would raise up to $300 million in sovereign financing for projects including work to stabilize Egypt's grid, adding battery storage, developing the local supply chain for renewables, and retraining workers, Harmgart added.

She explained that a separate $1 billion pledged for renewables would be about one tenth of the private funding needed for 10GW of mainly wind-powered projects planned by the government by 2028.

Egypt is a natural gas producer that is trying to cut down on domestic consumption so that it can export more to Europe at a time of high prices and demand resulting from Russia's invasion of Ukraine.

It has a power surplus after installing three huge gas-fired power plants built by Siemens from 2015.

The government is hoping gas exports can help contain pressure on Cairo’s currency after the Ukraine war triggered the latest dip in dollar inflows from portfolio investment and tourism.

The role of gas is set to be an issue of dispute at the COP27 climate summit in Egypt in November.

Climate activists say there should a rapid transition away from gas. As host of COP27, Egypt is giving a voice to some African states that want to continue using gas as a transition fuel to develop their economies.

About 3GW of the planned 10GW of new renewable power would be made available for a pilot phase in the production of green hydrogen in Egypt's Red Sea port of Ain Sokhna, Harmgart said.

Some would go to replacing capacity lost through the decommissioning of the thermal power plants.

Egypt has announced a string of memoranda of understanding for green hydrogen and ammonia projects at Ain Sokhna.

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Business

US Economy Grew at Solid 3% Rate Last Quarter, Government Says in Final Estimate

FILE - The New York Stock Exchange, at rear, is shown on Sept. 24, 2024, in New York. (AP Photo/Peter Morgan, File)
FILE - The New York Stock Exchange, at rear, is shown on Sept. 24, 2024, in New York. (AP Photo/Peter Morgan, File)
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US Economy Grew at Solid 3% Rate Last Quarter, Government Says in Final Estimate

FILE - The New York Stock Exchange, at rear, is shown on Sept. 24, 2024, in New York. (AP Photo/Peter Morgan, File)
FILE - The New York Stock Exchange, at rear, is shown on Sept. 24, 2024, in New York. (AP Photo/Peter Morgan, File)

The American economy expanded at a healthy 3% annual pace from April through June, boosted by strong consumer spending and business investment, the government said Thursday, leaving its previous estimate unchanged.
The Commerce Department reported that the nation's gross domestic product — the nation's total output of goods and services — picked up sharply in the second quarter from the tepid 1.6% annual rate in the first three months of the year, The Associated Press reported.
Consumer spending, the primary driver of the economy, grew last quarter at a 2.8% pace, down slightly from the 2.9% rate the government had previously estimated. Business investment was also solid: It increased at a vigorous 8.3% annual pace last quarter, led by a 9.8% rise in investment in equipment.
The final GDP estimate for the April-June quarter included figures showing that inflation continues to ease, to just above the Federal Reserve’s 2% target. The central bank’s favored inflation gauge — the personal consumption expenditures index, or PCE — rose at a 2.5% annual rate last quarter, down from 3% in the first quarter of the year. Excluding volatile food and energy prices, so-called core PCE inflation grew at a 2.8% pace, down from 3.7% from January through March.
The US economy, the world's biggest, displayed remarkable resilience in the face of the 11 interest rate hikes the Fed carried out in 2022 and 2023 to fight the worst bout of inflation in four decades. Since peaking at 9.1% in mid-2022, annual inflation as measured by the consumer price index has tumbled to 2.5%.
Despite the surge in borrowing rates, the economy kept growing and employers kept hiring. Still, the job market has shown signs of weakness in recent months. From June through August, America's employers added an average of just 116,000 jobs a month, the lowest three-month average since mid-2020, when the COVID pandemic had paralyzed the economy. The unemployment rate has ticked up from a half-century low 3.4% last year to 4.2%, still relatively low.
Last week, responding to the steady drop in inflation and growing evidence of a more sluggish job market, the Fed cut its benchmark interest rate by an unusually large half-point. The rate cut, the Fed’s first in more than four years, reflected its new focus on shoring up the job market now that inflation has largely been tamed.
Some other barometers of the economy still look healthy. Americans last month increased their spending at retailers, for example, suggesting that consumers are still able and willing to spend more despite the cumulative impact of three years of excess inflation and high borrowing rates. The nation’s industrial production rebounded. The pace of single-family-home construction rose sharply from the pace a year earlier.
And this month, consumer sentiment rose for a third straight month, according to preliminary figures from the University of Michigan. The brighter outlook was driven by “more favorable prices as perceived by consumers” for cars, appliances, furniture and other long-lasting goods.
A category within GDP that measures the economy’s underlying strength rose at a healthy 2.7% annual rate, though that was down from 2.9% in the first quarter. This category includes consumer spending and private investment but excludes volatile items like exports, inventories and government spending.
Though the Fed now believes inflation is largely defeated, many Americans remain upset with still-high prices for groceries, gas, rent and other necessities. Former President Donald Trump blames the Biden-Harris administration for sparking an inflationary surge. Vice President Kamala Harris, in turn, has charged that Trump’s promise to slap tariffs on all imports would raise prices for consumers even further.
On Thursday, the Commerce Department also issued revisions to previous GDP estimates. From 2018 through 2023, growth was mostly higher — an average annual rate of 2.3%, up from a previously reported 2.1% — largely because of upward revisions to consumer spending. The revisions showed that GDP grew 2.9% last year, up from the 2.5% previously reported.
Thursday’s report was the government’s third and final estimate of GDP growth for the April-June quarter. It will release its initial estimate of July-September GDP growth on Oct. 30.