Egypt Cautiously Optimistic Suez Canal Traffic Will Revive, Minister Says

Egypt is “cautiously optimistic” a ceasefire between Israel and Hamas will eventually translate into a recovery in Suez Canal revenue, which fell at least 60% due to the war, the country’s minister for foreign trade and investment said.

“It’s not going to be an immediate switchback to the Suez Canal as we envisage,” said Egypt’s Hassan El Khatib in an interview with Bloomberg Television at the World Economic Forum in Davos, Switzerland on Thursday. “We will study it and we will talk to shipowners.”

Traffic through the Egyptian waterway, one of the world’s major trade routes, dwindled since Yemen’s Houthi rebels in late 2023 began targeting Red Sea shipping in solidarity with Palestinian militant group Hamas, hobbling an important source of foreign currency. A six-week truce that began Sunday in Gaza raised the prospect the attacks will ease, although a full revival of crossings isn’t expected to quickly materialize.

A return to normality for the Suez Canal would be welcome news for Egypt as it looks to emerge from its worst economic crisis in decades. Authorities allowed the currency to weaken about 40% last March, securing fresh assistance from the International Monetary Fund and others as part of a $57 billion global bailout.

Since the ceasefire, the Houthis said they’d stop targeting US and UK ships in response to the pause in fighting between Israel and Hamas. Still, shipping firms such as A.P. Moller-Maersk A/S indicated it’s too early to plan a return. Egypt has said Red Sea disruptions cost it at least $7 billion last year.

El Khatib was appointed to Egypt’s cabinet in July, part of an extensive reboot, as the Middle East’s most populous country looks to attract large-scale foreign direct investment. Selling stakes in a range of state assets to strategic investors or via the stock market is a major IMF-backed goal.

Egypt’s investor-friendly monetary policy will be key to that, according to the investment minister. “The central bank narrative today is very clear,” El Khatib said. “It’s something we can put forward to investors and they will actually like, because simply it’s inflation targeting and a flexible exchange rate.”

The government expects to see at least three or four asset sales in the first half of 2025, Finance Minister Ahmed Kouchouk told a Davos panel on Wednesday. Authorities say they’re revising the list of offerings and have previously announced they seek to raise as much as $2.5 billion via the deals by the end of June.

Before joining the government, El Khatib worked at financial institutions including the European Bank for Reconstruction and Development, where he oversaw direct investments and equity funds.