The ongoing conflict known as “Iron Swords” has created a ripple effect that extends beyond the countries directly involved in the fighting. Egypt, in particular, is feeling the brunt of this war at a time when the country is already struggling with its own economic challenges.
One of the most significant impacts of this crisis has been on Egypt’s Suez Canal, which has seen a 64% drop in traffic in the first two weeks of 2021 compared to the same period last year. This drop has had serious financial implications for Egypt, with revenue dropping by approximately 47% compared to the previous year. In an effort to mitigate the impact of this crisis, Egypt has asked the Houthis to focus their attacks only on Israel.
However, despite these efforts, the damage to Egypt’s economy continues to mount. The country’s debt crisis has worsened over recent years and now stands at more than 160 billion dollars. This has led credit rating companies to downgrade Egypt’s credit image and classify it as a high-risk country.
In an attempt to address these challenges, Egypt is seeking additional aid funds from international organizations such as the International Monetary Fund (IMF). However, progress on this front has been slow due to political tensions between Egypt and other countries involved in negotiations. Despite these challenges, there are signs that things may be starting to turn around for Egypt as it continues to work towards reform measures that could help stabilize its economy and improve its long-term prospects.