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Egypt's current account deficit at $4.98 billion in Q1 2016/17

Egypt's current account deficit at $4.98 billion in Q1 2016/17
Egypt's current account deficit at $4.98 billion in Q1 2016/17
People walk in front of the Central Bank of Egypt's headquarters at downtown Cairo, Egypt, November 3, 2016. Picture taken Egypt, November 3, 2016. REUTERS/Mohamed Abd El Ghany

CAIRO (Reuters) - Egypt's current account deficit widened to $4.98 billion in the first quarter of the 2016/17 financial year from a deficit of $4.0 billion in the same period a year earlier, the central bank said in a statement on Thursday.

The overall balance of payments was in surplus to the tune of $1.9 billion compared to a deficit of $3.7 billion in the same period a year earlier, the statement said.

Egypt's economy is struggling to recover after a mass uprising in 2011 that drove away tourists and foreign investors and created a shortage of foreign currency that has sapped its ability to purchase from abroad and revive key industries.

Conditions worsened after a bomb brought down a Russian plane carrying 224 people from a Red Sea resort in October 2015.

The growth in the current account deficit was partly the result of a 50.2 percent decline in the services surplus, which suffered a 56.1 percent drop in tourism revenues to $758 million.

Another factor was a decline in net transfers to $3.39 billion from $4.32 billion in the same period a year earlier. The number is made up almost entirely by net private transfers, which fell sharply because of a 22.3 percent drop in workers' remittances.

The trade deficit narrowed by 13.4 percent to $8.7 billion, the central bank said.

Net inflows of foreign direct investment rose to $1.9 billion from $1.4 billion. Portfolio investment in Egypt registered a net outflow of $841 million compared to an outflow of $1.4 billion in the same period last year.

Due to new deposits from some Arab countries, the external liabilities of the central bank jumped to $3.4 billion from $1.2 million in the same quarter a year earlier, central bank data showed.

(Reporting by Amina Ismail; Editing by Kevin Liffey)