Fitch Ratings Agency said that Israel’s war on Gaza poses some risks of a regional escalation, adding that this war has negative effects on neighboring countries, especially Egypt, Lebanon and Jordan, even though the conflict is still receding in the Gaza Strip and Israel.
The tourism sector was clearly affected in the three countries as a result of the war, as hotel occupancy in Egyptian South Sinai fell to less than 5% in the first days of the war, according to what the Vice President of the Tourism Chamber of the General Federation of Chambers of Commerce in Egypt, Hani Peter, told Al Jazeera Net during the month. the past.
Oil exporters
Regarding oil-exporting countries in the Middle East and North Africa, Fitch suggested that the high crude prices for the last year would support their credit metrics, based on the average price of Brent crude at $80 per barrel.
The agency expected that oil-exporting countries in the Middle East and North Africa would record stronger growth in 2024, with the growth momentum of the non-oil sector and the stability of crude production on a large scale after production cuts in 2023.
However, the agency indicated that weak global growth in 2024 may lead to further production cuts by the OPEC+ alliance, if the oil market turns decisively into surplus, noting that the recent agreement concluded at the end of last November highlighted the reluctance. A significant expansion in reducing production.
other countries
At the same time, credit fundamentals in other countries in the region are facing challenges resulting from high debt burdens and difficult financing conditions amid rising global interest rates.
The agency expects that domestic interest rates will remain high due to inflation trends, while Israel’s war on Gaza poses risks to tourism and morale, at least in the near term, and bilateral and multilateral financial support constitutes an important factor in easing restrictions in some countries, in addition to making some progress. In economic and financial reforms.
It is noteworthy that the credit rating agency Moody’s postponed the publication of the latest credit rating for Israel in mid-October, justifying this with the existing military developments in the region, after it was preparing to reduce it, even before the outbreak of war.
Economy of Israel
The American bank, JPMorgan Chase, expected, in late last October, that the Israeli economy would shrink by 11% on an annual basis in the last three months of this year.
Specialists say that the risks are escalating and in turn negatively affecting the economy, adding that measuring the impact of the war on the Israeli economy is still difficult. Due to very high uncertainty about the scale and duration of the conflict, and the lack of high-frequency data at hand.
When specialists compared the Israeli losses resulting from its recent conflicts, they found that the effects of the current war would be much greater, as they say, what happened in 2014 when Israel launched a war on Gaza that lasted 51 days, and included a ground attack on the region, and the 2006 war with the Lebanese Hezbollah. “Israeli economic activity has hardly been affected.”
