Hard currency-carrying tourists continued to flood into Egypt in the spring, funding a 44 per cent year-on-year increase in tourism receipts to $5,475 million for the 12 months ending 30 June. Wedded to the steady recovery of Cairo's service industries and a marked improvement in Suez Canal revenues, the tourism revival helped to push the current account balance up to $3,729 million for the 2003/04 financial year. The current account surplus is the most positive signal of economic recovery there has been in at least five years.
The overall balance has not entirely lived up to the promise of its parts, however. The $7,523 million trade deficit, although only marginally worse than the same period in 2002/03, continues to weigh heavily on the government's accounts. The flotation of the local currency in January last year heralded a marked improvement in the competitiveness of exporters, while exports have also been bolstered by the ongoing development of the local gas sector. However, the import bill continues to mount, reaching $17,975 million by the end of June this year, up from $14,820 million in 2002/03. The signs of recovery in the current account have yet to filter through to the capital account, which continues to deteriorate. Direct investment in Egypt has slowed to a trickle, while the net investment deficit has widened by 104 per cent year-on-year to reach $6,076 million, contributing to an overall deficit in the balance of payments (BoP) of $158 million. The government can only trust in the saying that it is usually darkest before the dawn.
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