Ahmed Kamel – Egypt Daily News
Egypt’s trade deficit widened significantly during the first two months of 2026, highlighting mounting pressure on the country’s external balances as imports continued to increase while export performance weakened amid growing regional uncertainty.
New figures released by CAPMAS showed the trade gap reaching $10.3 billion during January and February, compared to $6.9 billion during the same period last year. The deterioration became more visible in February alone, when the monthly trade deficit rose sharply compared to the same month in 2025, reflecting continued pressure on Egypt’s balance of payments despite ongoing economic reform efforts.
The data comes at a delicate time for the Egyptian economy as regional tensions continue to weigh on markets and investor sentiment. Although the figures reflect trade activity before the full escalation of the US-Israel conflict with Iran, economists expect the regional fallout to place additional strain on inflation, foreign currency availability, shipping costs, and commodity prices in the coming months.
Exports, which remain central to Egypt’s strategy for strengthening foreign currency inflows, declined during the first two months of the year. Total exports fell to nearly $8 billion after exceeding $9 billion during the same period in 2025, with non-petroleum exports recording the largest decline. The slowdown points to continuing challenges facing Egypt’s manufacturing and industrial sectors despite government efforts to boost competitiveness and expand export capacity.
Meanwhile, imports continued climbing as Egypt increased purchases of industrial supplies, energy products, food commodities, and investment goods. Total imports rose to more than $18 billion during January and February, driven largely by higher demand for intermediate goods and energy-related imports.
Energy trade figures also reflected shifting market conditions. While petroleum exports recorded a moderate increase, liquefied natural gas exports declined noticeably, highlighting growing domestic consumption pressures and changes in regional energy dynamics. At the same time, Egypt’s natural gas imports increased significantly, underlining the country’s rising energy requirements despite ongoing ambitions to position itself as a regional energy hub.
The latest data also reinforced Egypt’s continued reliance on imported strategic commodities. Wheat remained the country’s largest agricultural import, alongside substantial imports of corn and soybeans used in food production and livestock feed. Agricultural exports, however, continued to provide important support for foreign currency revenues, led by strong shipments of oranges, potatoes, strawberries, and citrus products.
The United States, Italy, Saudi Arabia, Turkey, and Spain ranked among Egypt’s leading export destinations during the period, while China maintained its position as the country’s largest source of imports.
The widening trade gap adds another challenge for Egypt’s broader reform agenda as authorities work to stabilize the economy, attract investment, and strengthen private sector growth following years of currency volatility and external economic shocks.
Although the government is targeting annual non-oil export growth of up to 20 percent by 2030, recent business indicators suggest the recovery remains uneven. Egypt’s non-oil private sector has continued contracting for several months, with companies citing weaker demand, regional instability, and rising operating costs as major pressures on business activity.
International financial institutions have also warned that prolonged geopolitical tensions could disrupt global trade flows and tighten financial conditions worldwide, creating additional risks for economies heavily dependent on imports and external financing.
