The current account balance for more than forty years--except during the two depressions of 1968 and 1973 following war with Israel--was in the red, as was the merchandise trade balance, but the current account deficit was smaller. The accumulated deficit from 1950 through 1967 came to ŁE993 million. The first serious jump, however, took place in 1975, when the current deficit rose to US$1.56 billion from US$0.36 billion the previous year, reflecting an increase in imports because of the oil boom. Between 1982 and 1988, the current deficit averaged US$3.6 billion, or about 9 percent of GDP. This occurred in spite of the steady rise in income from exogenous resources. There were years in which the deficit was lowered because of the large inflow of foreign currency, such as in 1983 when it fell to about US$2.4 billion from US$3.1 the previous year, thanks to a rebound in remittances, but the overall trend was for it to rise. In 1985 the current account deficit soared to about US$4.7 billion or 14.3 percent of GDP. This deficit increase compelled the government to impose restrictions on imports by temporarily suspending the own-exchange (that is, foreign exchange supplied directly by the importer rather than through commercial banks; much foreign exchange in Egypt circulated outside formal channels) import system to ameliorate the deficit. In part as a result of policy and in part because of the lack of foreign exchange, imports were subsequently reduced, and the deficit improved. In 1988 it was slightly more than one-half of the 1985 deficit and the equivalent of 6.6 percent of GDP. Much pressure was being exerted on the government, especially because of the tremendous accumulated debt, to lower the annual deficit further, if not to shift to a positive balance of payments (see Debt and Restructuring , this ch.).
Data as of December 1990