Egypt reported, on Monday, that strikes in the Red Sea led to a decline in Suez Canal revenues by about 60 percent, amid an increase in public expenditures for the state facing an economic crisis.
The Minister of Finance, Mohamed Maait, said in a local discussion session, on Monday, that the state bearing additional burdens from the public treasury, with the rise in financing costs in exchange for a decline in Suez Canal revenues of about 60 percent, makes the state enter a “corrective phase†in the course of the economy.
Maait added that these corrective measures come with the aim of “overcoming the extremely harsh negative effects of external and internal challenges and reducing potential risks, in light of the escalating repercussions of the Russian military operation in Ukraine and Israeli invasion and genocide in Gaza, and other manifestations of instability in the Middle East, including the state of turmoil in the Red Sea region.”
Egypt witnessed, according to the Economy Middle East website, a sharp decline in its revenues from Suez Canal fees, as a result of the attacks launched by the Yemeni Houthi rebels on ships in the Red Sea region since last November, “to support Gaza,” as they say.
According to the Egyptian Minister, the inflationary wave resulting from the global and regional crises raised the import bill by about $4 billion per month, as the largest part of it is “inevitable expenses.”
He continued: “Wages, pensions, support, development, health, education, meeting the needs of citizens, and paying state obligations… Spending on supporting petroleum resources has increased very much and is approaching 200 billion pounds ($4.29 billion) as a result of the increase in global prices, shipping costs, and the change in the exchange rate against the dollar.”
Egypt is facing the largest economic crisis in its modern history, with an inflation rate that approached the level of 40 percent before declining slightly, and a local currency that lost 50 percent of its value, which led to price fluctuations.
60 percent of Egypt’s population of approximately 106 million people live around the poverty line, according to the Al Arabiya website.
Maait said that the state is working “to support agriculture, industry, information technology, and stimulate production and export” to stimulate the economy, noting the country’s seriousness in implementing initiatives that stimulate the business climate and attract more investment flows to the country.
Last February, Cairo announced that Abu Dhabi would inject “$35 billion in direct investments” within two months in Egypt, according to an agreement signed between the Egyptian and Emirati governments to “develop 170.8 million square meters in the Ras El Hekma area” on the Mediterranean Sea in northwest Egypt.
