Cairo – Ma’an – The Hebrew newspaper “Calcalist” reported that Israel’s control of the Rafah crossing will harm Egypt economically.
She pointed out that the Egyptian Stock Exchange suffered from instability last week due to fears of the escalation of the war near its borders.
According to the Israeli economic newspaper, the repercussions of the war in Gaza and Israel’s control of the border with Egypt have major negative effects on the Egyptian economy, including increasing inflation in the country, the flight of tourists, and the emptying of the Suez Canal.
The newspaper’s economic analyst, Doron Peskin, said that the evacuation of residents and displaced people from the Rafah areas, which began yesterday morning, Monday, is the beginning of the scenario that Egypt feared, despite Israel’s announcement that it had coordinated the step with Egypt, and that it would launch a limited-scale operation, and that measures would be taken to prevent the move. Towards the Egyptian border, indicating that Cairo is f
acing difficulty in concealing the fears that the Egyptian elite has had since the beginning of the war, that fires might break out immediately upon reaching Rafah, that is, the border between Egypt and Gaza.
During the past week, the Egyptian Stock Exchange witnessed a state of instability, and this is due, according to traders in Cairo, to the fear of a military escalation on the country’s borders. It is expected that the main index of the Egyptian Stock Exchange, which currently stands at about 26 thousand points, will decline and is heading towards the 20 thousand mark. A point in Israel’s continuation of a large-scale operation in Rafah, the results of which are still unclear.
The Israeli report explained that Egypt is so far one of the biggest economic losers from the war in Gaza and the Rafah operation, and its losses may increase further, as the government of President Abdel Fattah El-Sisi is well aware of the unrest experienced by large sectors of the Egyptian public, against the backdrop of the ec
onomic situation that is manifested in an inflation rate of approximately 37%. % and lower purchasing power.
The report indicated that since October 7, there have been two prominent industries in Egypt that generate foreign exchange income for Egypt: tourism and the Suez Canal. At the end of last week, the Egyptians announced that they would be able to convince the parties to cease fire, and despite the improvement in the recovery prospects for these two important economic sectors, Their hopes were dashed when Israeli forces entered the city of Rafah and took control of the crossing from the Palestinian side.
The report added: ‘If the war does not stop and takes place in the Rafah region near Sinai, it is expected that Egypt’s tourism revenues this year will witness a decline of between 10% and 30% compared to last year, which may reduce its foreign exchange reserves as well as harm its potential.’ ‘Last year, the tourism sector brought nearly $14 billion to the Egyptian treasury, which is more than any oth
er economic sector in the Egyptian economy.’
He stated, “Egypt is also facing a problem regarding the Suez Canal, which last year recorded a record amount of $9.4 billion, but since last November, when the Houthis in Yemen began attacks on ships in the Red Sea and the Arabian Sea, there has been a significant decline in shipping traffic in the Suez Canal, and it took It takes Egypt some time to admit that it was indeed affected by the Houthi attacks, and a few days ago, the Egyptian authorities admitted that since the beginning of the year, Egypt has witnessed a 50% decline in Suez Canal revenues.
The report explained that the ceasefire agreement could have created the appropriate conditions for the gradual return of shipping traffic in the Suez Canal, but the Houthis have already announced that the operation in Rafah will lead to an escalation of their attacks, the effects of which will also reach the Mediterranean Sea, which may also increase the damage caused. It affected Egypt’s economy.
The website sa
id that the authorities in Cairo have many and varied reasons to prevent the entry of Palestinians from Gaza into their lands. The issues are related to political, security and economic reasons. The Egyptians have already found themselves dealing with the problem of about 600,000 Sudanese refugees who fled the civil war in their country, and Cairo explains that this is due to the resources… Given the limited economic opportunities available to Egypt, dealing with thousands more refugees from Gaza is not possible.
According to Egyptian sources, thousands of wounded people from Gaza and their families have entered the country since October, and the country’s meager resources are straining the Egyptian treasury, adding: ‘If Egypt’s troubles resulting from the war in Gaza are not enough, it is facing the problem of energy shortages for the upcoming summer season.’ Egyptian gas production is declining.’
According to sources in the Egyptian Ministry of Oil, gas production from the huge Zohr field, in the Medite
rranean, is currently at its lowest level since 2017.
Source: Maan News Agency