Egypt's economy can weather more Red Sea attacks, says finance minister
Egypt lost some $13 billion worth of Suez Canal fees over two years due to Houthi attacks in the Red Sea, according to estimates from Egyptian officials.
DAVOS, Switzerland — Egypt’s economy is now well-positioned to weather a sharp drop in Suez Canal traffic this year if there is any more instability in the region, the country’s finance minister said on Thursday.
The Gaza war, sparked by Hamas’s October 2023 attack on Israel, disrupted tourism in Egypt, while Iran-backed Houthi rebels in Yemen attacked commercial vessels in the Red Sea, throttling Suez Canal traffic. Both sectors were major sources of foreign currency for the country. At the time, the Houthis said they were targeting ships in response to Israel’s offensive in Gaza.
The man-made waterway previously carried about 12% of global trade and accounted for roughly 2% of Egypt’s GDP. But the two-year conflict prompted global shipping companies to avoid the Red Sea-Suez Canal route, instead rerouting around South Africa’s Cape of Good Hope — a journey at least 10 days longer.
As a result, Egypt lost an estimated $13 billion in canal fees over two years, while the North African country also faced a severe foreign currency shortage and an economic crisis.
