Key facts
- Egypt's remittance inflows hit a record USD 5.5 billion in March.
- Remittance inflows to Egypt increased by 62% year-on-year in March.
- Egypt's foreign exchange reforms in March 2024 eliminated the black market premium.
- Egypt's foreign trade deficit widened by 48.8% to $4.6 billion in March.
- Saudi commercial banks' claims on the private sector grew 7.2% year-over-year to SAR 3.23 trillion by the end of April.
- Qatar recorded a budget deficit of $2.8 billion in the first quarter.
- Qatar's total revenues fell 23% year-over-year in the first quarter.
- Serbia's budget deficit widened by 27.8% to RSD 99.6 billion in January-April.
- Angola's trade surplus decreased to AOA 2.04 trillion in April.
- Tunisia's central bank maintained its key interest rate at 7%.
Egypt has achieved a record high in remittance inflows, reaching USD 5.5 billion in March, a significant 62% increase compared to the previous year. This surge is largely attributed to foreign exchange reforms implemented in March 2024, which successfully abolished the black market for currency and eliminated the premium associated with it. The substantial influx of foreign currency has provided crucial support to the Egyptian pound, especially in the context of capital flight potentially triggered by regional conflicts.
Despite the positive remittance figures, Egypt's foreign trade deficit widened considerably by 48.8% year-on-year, reaching $4.6 billion in March. This widening deficit was primarily driven by a substantial increase in imports, particularly for gas and petroleum products, while the country's exports experienced a decline.
In Saudi Arabia, commercial banks' claims on the private sector saw a notable growth of 7.2% year-over-year, reaching SAR 3.23 trillion (approximately USD 860 billion) by the end of April. This expansion was mainly fueled by personal and trade loans, although real estate lending showed weakness. The rapid credit growth outpaced deposit growth, resulting in tighter liquidity conditions within the banking system. Despite these liquidity pressures and regional geopolitical risks, the Saudi banking system is described as profitable and resilient.
Qatar, on the other hand, recorded a budget deficit of $2.8 billion in the first quarter of the year. This marks the fifth consecutive quarterly shortfall for the nation. Total revenues for the quarter fell by 23% year-over-year, a decline attributed in part to the conflict in Iran.
Other regional economic developments include Serbia's central government budget deficit widening by 27.8% year-on-year to RSD 99.6 billion for January-April, representing 0.9% of GDP, with revenues rising 10.3% and expenditures increasing 12.1%. Angola's trade surplus narrowed in April to AOA 2.04 trillion, despite a 76.9% year-over-year increase driven by oil market conditions, highlighting the nation's reliance on hydrocarbon exports. The South African rand has shown resilience, influenced by interest rate hikes and positive ratings, though market sentiment is also affected by global geopolitical events. Tunisia's central bank maintained its key interest rate at 7%, citing external risks to inflation and noting a narrowing current account deficit to 1.5% of GDP in January-April. In the US, stock markets experienced a decline, potentially linked to an anticipated increase in the supply of publicly listed equities from upcoming IPOs and private equity divestments, contrasting with a long-term trend of shrinking equity supply.