Another Tilt of the hat to our blogging brethren for the heads up about a primer on Egypt out Monday from Capital Economics.
We were struck by this chart showing the components of Egypt’s current account (im)balance. Click to expand:
The World Bank’s People Move blog puts Egypt in the top ten of remittance receivers worldwide. After oil and tourism they are Egypt’s third largest source of income, says its foreign ministry, via Bikyamasr.
According to Nomura, remittances from workers abroad, most of whom are based in the Gulf, contribute more than $9bn in foreign exchange revenues annually. (Though the bulk of the amount sent back comes from the US.) The chart from Capital Economics suggests how important these have been for allowing Egypt to finance a widening deficit.
Both sets of analysts report that $36bn in reserves should be sufficient to cover any immediate foreign exchange needs if remittances (or foreign capital, more importantly) were to decrease.
But it’s an interesting factoid regardless — worth remembering alongside the better-known and shocking unemployment figures. And worth watching if the means of remittance transfers continue to be interrupted.
Related links:
Egypt coverage – FT Tilt (subscription)
A hunger for change - FT Alphaville