Egypt’s tourism, Suez Canal revenues could shrink by $13.7 bln through FY24/25 over war on Gaza

The study envisions three scenarios for the Gaza war, a low-intensity scenario where Egypt would lose $3.7 billion, a medium-intensity scenario where Egypt would lose $9.9 billion, and a high-intensity scenario where Egypt would lose $13.7 billion.

The two sectors together account for around 20 percent of the Egypt’s foreign currency receipts.

Before the outbreak of the Gaza war, tourism contributed 8.3 percent (EGP 612.6 billion) of GDP, up from 3.8 percent in 2020 during the COVID-19 pandemic.

The council also estimates that travel and tourism activities generated 2.37 million jobs in 2022 (8.5 percent of total direct and indirect employment).

Canal revenues jumped to $8.8 billion in FY202220/23, up from $7 billion the fiscal year before, while tax and dividend revenues from the Canal are expected to represent eight percent of total revenues for the current FY2023/2024, according to the Central Bank of Egypt (CBE).

As a result of the Gaza war, the Suez Canal Authority announced that the Canal’s revenues declined by 46 percent (Y-o-Y) in January 2024.

Economic cost of Gaza war to Egypt’s economy
 

Titled “Potential Socioeconomic Impacts of the Gaza War in Egypt: A Rapid Assessment,”, the study expects the total economic cost of the war to Egypt’s economy during FY2023/2024 and FY2024/2025 to hit $5.6 billion under the low-intensity scenario, $14.6 billion under the medium-intensity scenario, and $19.8 billion under the high-intensity scenario.