Red Sea tensions costs Egypt 70% of Suez Canal revenues
The International Monetary Fund (IMF) stated that Red Sea tensions have cost Egypt 70% of its Suez Canal revenues, which are considered a major source of foreign currency for the country.
This came in a statement issued by the (IMF) on Wednesday evening, after its delegation concluded a visit to Egypt that lasted from the 6th to 20th of November, to conduct the fourth review of an economic reform program accompanied by an ($8) billion loan.
The Fund stated that with the continuation of multiple geopolitical tensions in the region, “The economic outlook for the region, including Egypt, remains difficult.”
The statement added that “The effects of the conflicts in Gaza and Israel as well as the disruptions of trade in the Red Sea continue to negatively affect sentiment and cause significant declines of up to (70%) in Suez Canal revenues, which are a major source of foreign currency for Egypt.”
Throughout this year Egypt had suffered from a rise in inflation that exceeded (35%), before embarking on a downward journey to reach approximately (26%) at the moment.
Egypt had previously signed an agreement with the International Monetary Fund last March on a financial support package worth ($8) billion to assist in coping with the repercussions of a global economic crisis that contributed to raising the prices of goods and services in Egypt.
The agreement includes Egypt implementing economic reforms, most notably; adopting a flexible exchange rate system, reducing spending on infrastructure projects, and empowering the private sector, according to the official Egyptian Information Service.
Egypt had received a tranche worth ($820) million from the (IMF) after the third review was conducted at the end of last June.
The Rapid Support Forces’ decision to ban the export of Sudanese goods and resources to Egypt has had an impact after the latter was accused of participating alongside the Sudanese Army Forces via warplanes in bombing Sudanese areas, destroying infrastructure, and killing Sudanese citizens in various parts of the country.
