Egyptian Finance Minister Mohamed Maait said that his country’s estimates indicate a decline in Suez Canal revenues by 60% due to the existing Red Sea tensions. This was stated on the sidelines of the minister’s participation in the work of the economic policy-making conference held in Cairo, at a time when the Red Sea crisis entered its seventh month, indicating that this is happening at a time when public expenditures in the country are increasing.
The minister considered that the Red Sea crisis, in addition to the slowdown in economic activity, the decline in trade movement, and the restrictive policies used to deal with the inflationary effects of global crises, negatively affect Egypt’s tax and non-tax revenues.
Last month, Egyptian Planning Minister Hala Al-Saeed said that there was a 50% decline in Suez Canal revenues, due to the existing tensions in the Red Sea.
The Suez Canal is one of the most important canals and straits around the world. It is the shortest shipping route between Europe and Asia, and is one of the main sources of hard currency for Egypt. Suez Canal revenues constitute one of the most prominent sources of foreign exchange in Egypt.
In the fiscal year 2022-2023, the channel achieved financial revenues amounting to $9.4 billion, which is the highest annual revenue it has ever recorded, and an increase of about 35% over the previous year.
Last March, the International Monetary Fund announced that the volume of trade in the Suez Canal would decline by 50% during the first two months of 2024 as a result of the attacks in the Red Sea.
The IMF explained – in a statement – that international trade has been disrupted in the past few months as a result of disturbances in the most important maritime trade route, where about 15% of global maritime trade usually passes, according to what was reported by the Anatolia Agency.
The statement added that some maritime transport companies changed their route from the Red Sea and Suez Canal to the Cape of Good Hope, which led to an increase in delivery times by an average of 10 days or more.
In solidarity with the Gaza Strip, which has been exposed since October 7, 2023, to a devastating Israeli war with American support, the Yemeni Houthi group is targeting, with missiles and drones, cargo ships in the Red Sea that are owned or operated by Israeli companies, or that transport goods to and from Israel.
With the intervention of Washington, London, and other countries, they formed an alliance to prevent Houthi attacks in the Bab al-Mandab Strait and the Red Sea, the Houthi group announced that it now considered all American and British ships among its military targets.
