UPDATE 2-Egypt current account deficit nearly doubles in Jan-March

* Shortfall jumps to $3.75 bln from $1.93 bln

* Trade deficit expands to $10.5 bln from $9.3 bln

* Net FDI falls to $1.81 bln from $2.26 bln (Recasts with figures for third quarter, adds analyst comment)

CAIRO, July 4 (Reuters) - Egypt’s current account deficit nearly doubled to $3.75 billion in the third quarter of the 2018/19 fiscal year, largely due to a rise in non-oil imports and an oil trade deficit, central bank data showed on Thursday.

The current account deficit was $1.93 billion in the same quarter, January to March, a year earlier. Egypt’s fiscal year begins on July 1.

Allen Sandeep, head research at Naeem Brokerage, said the surge in the current account deficit was due to a widening of both non-oil imports and the oil trade deficit.

“Local industries need to take off in order to manufacture local substitutes instead of imports,” he said. “And for that to happen, non-oil FDI and local private sector investments have to pick up in the years ahead.”

The trade deficit widened to $10.5 billion from $9.26 billion a year prior, Reuters calculations based on central bank data showed. Net foreign direct investments (FDI) narrowed to $1.81 billion from $2.26 billion a year prior.

The January to March 2019 FDI figure was mainly driven by investments in the oil and gas sector, which edged up to $1.4 billion from $1.3 billion.

Egypt’s economy has struggled to lure back foreign investors and tourists since a 2011 uprising drove them away. In late 2016, it signed a $12 billion deal with the International Monetary Fund to boost growth. The three-year agreement is set to end later this summer.

“At this stage, FDI should have been growing faster,” said Angus Blair, chairman of business and economic forecasting think-tank Signet.

Activity in Egypt’s non-oil private sector contracted in June for the second consecutive month, though at a slower pace than in May, the Emirates NBD Egypt Purchasing Managers’ Index (PMI) for the non-oil private sector showed on Wednesday.

It strengthened to 49.2 in June from 48.2 the prior month, remaining below the 50 mark that separates growth from contraction.

“The PMI survey indicates that the private sector is still being buffeted by the headwinds of increased costs, and potential foreign investors, while very interested in Egypt, have yet to jump in and invest,” Blair said.

Egypt’s travel revenues, one of its main sources of foreign currency, rose to $2.6 billion in the third quarter of the 2018/19 fiscal year from $2.27 billion a year prior. The figure, however, was lower quarter-on-quarter, as travel revenues were $2.86 billion in October to December 2018.

Blair expected tourism to continue to improve, as new flights to Egypt are added, particularly from Europe.

Remittances from Egyptians abroad, another key source of hard currency, slipped to $6.17 billion from $6.46 billion in the same period last year. Foreign portfolio investments inflows rose to $6.94 billion from $6.91 billion.

The overall balance of payments surplus tumbled to $1.42 billion from $5.38 billion in the same quarter a year prior. (Reporting by Yousef Saba, Nadine Awadalla, Aidan Lewis and Eman Kharoshah; Editing by Toby Chopra, Patrick Werr/Mark Heinrich)