Gaza War Pushes Egypt’s Economy To The Edge.
The Egyptian economy, already struggling for several years, has been severely impacted by the war in Gaza. The escalation of the conflict between Israel and its neighbors has become yet another obstacle to economic reforms and development in Egypt.
A UN report estimates that the total economic cost of the Gaza war for the Egyptian economy will reach between $5.6 billion and $19.8 billion over the current and next fiscal years (2024-2025). This represents a loss of between 1.6% and 5.2% of average GDP, depending on the extent of the conflict’s escalation. The country is suffering significant revenue losses due to the suspension of Israeli gas re-exportation.
Traffic through the Suez Canal and the tourism sector are likely to be the hardest hit, according to the report. Their revenues are expected to decrease by $3.7 billion to $13.7 billion over the current and next fiscal years.
Projections for the coming months are worrying. The unemployment rate could reach 9.1% in the event of a serious escalation of the conflict. These factors exacerbate a crisis already inflamed by the war in Ukraine, adding to an unsustainable debt and a cost-of-living crisis that has persisted since 2022.
