Egypt: Individuals’ savings decline by EGP 843.5 billion

The annual bulletin on individuals’ savings in different saving schemes, issued by the Central Agency for Public Mobilization and Statistics (CAPMAS) for FY2018/2019 indicated a decline in individuals’ savings by about 843.3 billion Egyptian pounds, a drop of 24%.

According to CAPMAS data, the savings of individuals in Egyptian banks’ saving schemes at the end of the fiscal year 2017/2018 amounted to EGP 3 trillion and 503 billion Egyptian pounds against EGP 2 trillion and 660 billion at the end of the fiscal year 2018/2019.

The CAPMAS bulletin indicated that this decline in balances of individuals’ deposits in saving schemes was due to the fact that individuals’ deposits during the fiscal year 2018-2019 amounted to 1 trillion and 315.5 billion Egyptian pounds, while withdrawals of their savings during the same fiscal year amounted to EGP 2 trillion and 159 billion.

It is to be mentioned that the CAPMAS data is contradictory with the data of the Central Bank of Egypt (CBE) on deposits of the family sector, where individuals make up the majority, in the same fiscal year 2018/2019.

The CBA data indicated an increase in deposits of the family sector by about 344 billion Egyptian pounds at the end of the same fiscal year 2018/2019, with a growth rate of 14.5%. According to the CBA data,  deposits of the family sector in the fiscal year 2017/2018 amounted to 1 trillion and 885 billion Egyptian pounds against 2 trillion and 715 billion pounds at the end of the fiscal year 2018/2019.

About four years ago, Egyptian small depositors were able to obtain an annual interest of 20 percent on their bank savings, but now that interest has decreased to about 3 percent only, that is less than the annual inflation rate which reached 6 percent during December 2020. This means that the interest on deposits has gone negative, which prompted many small depositors to resort to other ways to invest their savings.

Some of those depositors went to the stock exchange, some resorted to the purchase of gold, some dealt with money employers for investing their savings in return for periodic interests higher than the interest offered by banks, some resorted to bitcoins, and others to the purchase of real estate and land.