• Sat. Mar 2nd, 2024

Iron Swords: How the War in Yemen is Crippling Egypt’s Economy

ByEditor

Feb 11, 2024
Egypt’s Economic Dilemma: Reliant on Israeli Gas but Seeking Alliances with the Houthis

The war known as “Iron Swords” is a unique conflict that has far-reaching consequences. In addition to its multi-arena nature, the war affects countries that are not directly involved in the fighting. One country that has been hit hard by this war is Egypt. This crisis comes at a terrible time for the country, as it grapples with debt, inflation and a crashing currency. Here are four notes on Egypt’s experience during “Iron Swords”:

The crisis in the Red Sea following the Houthi attacks resulted in a significant drop in traffic in the Suez Canal, with a 64% decline compared to last year. This has had serious financial implications for Egypt, with revenue dropping by about 47%.

To address this crisis, Egypt has asked the Houthis to focus their attacks solely against Israel and not target other shipping giants. However, this hasn’t stopped the damage to the Suez Canal from mounting as more ships were targeted by Houthi rebels.

Egypt’s debt crisis has been growing steadily over recent years, reaching over 160 billion dollars. The credit rating agencies have downgraded Egypt’s credit image due to this crisis and other economic factors, making it difficult for them to access additional aid funds.

Despite these challenges, Egypt is holding discussions with the International Monetary Fund (IMF) in hopes of securing additional aid funds. However, these efforts have been complicated by the fact that they were stopped last year because Egypt did not carry out necessary reform measures.

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