Egypt’s petrochemical sector captures 19.3% of total credit portfolio by March ’24

Egypt’s petrochemical sector captured 19.3 per cent of the total credit portfolio for the top 100 clients by the end of March 2024, according to the latest Central Bank of Egypt’s Financial Stability Report – March 2024.

This represents a notable growth rate of 37.5 per cent compared to March 2023. This growth contributed 17.9 per cent to the total growth of the portfolio.

The sector contributes to enhancing the trade balance by increasing petroleum product exports and reducing import costs while remaining one of the top sectors attracting foreign direct investment (FDI).

Sector Faces Production Declines

The first nine months of FY23/24 have been challenging for the oil and gas sector. Natural gas production dropped by 13.6 per cent, and output of refined products fell by 7.7 per cent compared to the same period last year.

This production decline turned a previous natural gas surplus into a deficit, and led to widening the gap between production and consumption of petroleum products by 21 per cent in the comparison period.

Additionally, exports of natural gas and refined products during the first nine months of of FY 2023/2024 plummeted by 92 per cent and 43 per cent, respectively compared to the same period the previous year, due to falling global prices for natural gas and Brent crude—by 34 per cent and 6 per cent YoY, respectively.

The sector has also been hit by geopolitical tensions in the region, which exacerbated the difficulties.

Attribution: Financial Stability Report – March 2024