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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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Saudi Arabia's Digital Advertising Boom: Addressing Economic Leakage, Boosting Local Content

A digital advertising event recently held in Riyadh (Asharq Al-Awsat)
A digital advertising event recently held in Riyadh (Asharq Al-Awsat)
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Saudi Arabia's Digital Advertising Boom: Addressing Economic Leakage, Boosting Local Content

A digital advertising event recently held in Riyadh (Asharq Al-Awsat)
A digital advertising event recently held in Riyadh (Asharq Al-Awsat)

Saudi Arabia’s digital advertising sector is experiencing rapid growth, but a significant portion of its revenues is leaking to foreign platforms. To maximize the impact on the national economy, experts are calling for strategies to curb this outflow and redirect it to local channels.

The importance of retaining digital ad revenues lies in the substantial size of this market. It is estimated that approximately $1 billion in ad spent is lost annually to foreign platforms, representing a considerable loss to Saudi Arabia’s economy.

Dr. Ebada Al-Abbad, CEO of Marketing and Communications at Tadafuq, a Saudi digital advertising network, told Asharq Al-Awsat that the problem stems from the fact that although advertisers, products, and audiences are often local, the largest share of financial gains goes to foreign platforms. He estimated that 70-80% of the $1.5 billion spent on digital advertising in Saudi Arabia in 2022 went to global platforms such as Google and Facebook. This results in the national economy losing nearly $1 billion annually from this sector alone.

Al-Abbad noted that government agencies in Saudi Arabia also contribute to the outflow. He explained that public sector spending on digital advertising, intended to raise awareness among citizens and residents, frequently ends up on foreign platforms. Government spending makes up about 20-25% of the total digital ad market in the Kingdom, meaning hundreds of millions of riyals leave the country annually, weakening the local digital economy.

Al-Abbad argues that Saudi Arabia needs strong local digital ad networks to keep this revenue within the national economy. These networks would help create jobs, drive innovation, and promote cultural diversity in digital content. Developing local platforms would also enhance Saudi Arabia’s digital sovereignty by ensuring that data remains within the country and is not controlled by foreign entities.

Moreover, local networks would reduce dependence on international platforms, ensuring that the economic benefits of digital advertising remain in the Kingdom, he said, stressing that this would align with Saudi Arabia’s broader Vision 2030 goals, which emphasize building a robust, diversified economy driven by local industries and digital transformation.

Globally, the digital advertising sector is growing rapidly. In 2022, worldwide spending on digital ads reached $602 billion, and it is projected to hit $876 billion by 2026. In the Middle East and North Africa (MENA) region, the digital ad market grew to $5.9 billion in 2022, with Saudi Arabia’s market accounting for over $1.5 billion.

In other countries, the digital ad sector plays a crucial role in boosting national economies. For example, in the United States, the digital advertising industry contributed $460 billion to the GDP in 2021, about 2.1% of the total. In the UK, the sector accounted for 1.8% of GDP in 2022. This shows how important digital advertising can be in driving economic growth.

One of the key challenges facing Saudi Arabia’s digital ad sector is the dominance of global platforms like Google and Facebook, which control 60% of the global digital ad market, Al-Abbad told Asharq Al-Awsat. This dominance results in a significant outflow of revenue and allows these platforms to control digital data and content. He warned that this could undermine Saudi Arabia’s national sovereignty over its digital economy.

To counter this, he emphasized that Saudi Arabia needs to build competitive local networks that can retain a larger share of the market. This will not only keep more revenue in the country but also strengthen the Kingdom’s control over its digital data and content.