Egypt Reels as Iran-Israel Conflict Escalates
The ongoing military conflict between Iran and Israel is having devastating effects on Egypt’s economy. From plummeting stocks to a postponed museum opening, the ripple effects of the war are being felt across the nation. This sudden economic downturn is impacting the country in many ways.
Economic Fallout Hits Hard
As the conflict intensifies, Egypt is suffering the most immediate economic consequences among African nations. The country’s banking sector is facing significant challenges due to the regional instability, adding to an already precarious financial situation. On Friday, the Egyptian stock index saw the worst losses in five years.
The value of Egypt’s currency has also dropped, going below 50 per dollar. According to a strategist at Tellimer in Dubai, Hasnain Malik, “It is no surprise that with an open-ended Israel-Iran shooting war under way, that regional markets have been pounded too, as far as Egypt, which has seen gas supplies from Israel cut off.”
Tourism and Industry Suffer
Beyond the financial markets, Egypt’s cultural and tourism goals have also been greatly affected. The much-anticipated opening of the Grand Egyptian Museum, a project costing $1 billion, has been postponed. It was scheduled to start on July 3 but has been pushed back to the fourth quarter, because of current regional developments. This delay is impacting the economy.
Industry insiders stated that a decline in gas shipments from Israel caused Egyptian fertilizer manufacturers to stop operations on Friday. The Grand Egyptian Museum could draw up to 5 million visitors each year, which would have meant a rise in foreign currency inflows and new employment opportunities.
Conflict Overview
Recent attacks between Israel and Iran have been ongoing. Israel has been conducting a series of bombings deep inside Iranian territory, allegedly killing key commanders and damaging missile installations. Iran responded by launching over 200 ballistic missiles and drones in an attack that they named Operation True Promise III.
Although these defenses stopped many, dozens struck locations such as Tel Aviv and Haifa. At least 10-15 Israeli civilians were killed, with hundreds injured. The U.S., Russia, China, and the EU have all asked for de-escalation, but with both nations determined to keep going, fears of a larger regional war are increasing.
Analysts warn that if Hezbollah in Lebanon or Iranian allies in Iraq and Yemen get more involved, the situation could worsen. The tourism sector, which brings in around $12 billion annually, is at risk, with recent estimates showing a possible 20% drop in tourism revenue (Statista, 2024).
