These countries are already facing Economic challenges Accumulated, and the conflict came to add new burdens and risks to the stability of their economies. In addition to the effects specific to each country, there were common effects among neighboring countries as a result of the increased uncertainty, including at the trade level, as movement was affected. Goods And goods, whether arriving or departing to and from Vital ports In the region, as a result of many factors including Tensions in the Red Sea.
The Middle East and North region is witnessing Africa A series of continuing challenges, given that “the conflict in Gaza and Israel has caused enormous human suffering,” according to an estimates report. International Monetary Fund The last one last April, which stressed that the outages are on the move shipping via Red Sea And reductions in production Oil “It exacerbated vulnerabilities arising from high debt levels and high borrowing costs.”
The Fund’s estimates indicate that in 2025, growth is expected to rise to 4.2 percent in the Middle East and North Africa, as the impact of these temporary factors is supposed to gradually subside.
The conflict in Gaza and Israel would exacerbate the current uncertainty, as the duration of the conflict and its impact remain shrouded in great uncertainty, according to the Fund, which previously stressed that conflicts negatively affect Economic activity In some fragile low-income countries.
The IMF is scheduled to release its updated economic forecasts for all countries and the global economy later in October, coinciding with the fall meetings of the International Monetary Fund and World Bank in Washington.
Massive losses
In this context, the Director of the Egypt Center for Economic and Strategic Studies, Dr. Mustafa Abu Zeid, pointed out in exclusive statements to the “Eqtisad Sky News Arabia” website, the catastrophic economic repercussions that affected the Palestinian economy due to the war, as it lost approximately 97 percent of its gross domestic product. , equivalent to about $18.5 billion, according to a report issued by the United Nations and the World Bank. These numbers clearly illustrate the extent of the collapse in the Palestinian economic system after the destruction of most of the infrastructure, facilities and vital services.
Abu Zeid added that the impact of the war extended to… Neighboring countriesincluding the Egyptian economy, which was partially affected as a result of these geopolitical tensions. But he explained that the Egyptian economy, due to the diversity of its resources, has a better ability to adapt.
And while I was exposed Suez Canal revenues Under pressure, tourism, exports, and direct and indirect foreign investments were helpful factors in supporting foreign exchange inflows. In addition, the Egyptian economy enjoys productive and manufacturing capabilities with relative exchange rate stability, despite inflationary pressures resulting from imported and domestic inflation.
He stressed the ability of the Egyptian economy to face these challenges, pointing to the recent increase in cash reserves, which amounted to more than $46 billion, and securing the strategic stock of goods for safe periods of time, which enhances the economy’s ability to deal with current crises.
As for the repercussions of the continuation of the war in the region, Abu Zeid explained that the crisis will lead to increasing economic collapse in Palestine, Lebanon, and Syria, which requires major international financial support for reconstruction and the adoption of economic reform programs that will return those economies to the path of growth.
The center director touched on Egypt For Economic and Strategic Studies, he referred to the Lebanese crisis, noting that the Lebanese economy has been suffering for years from a stifling financial crisis that has led to the collapse of the national currency and the erosion of its purchasing power, in addition to high inflation rates and a decline in the gross domestic product. This situation has caused an increase in poverty rates and a deterioration in the central bank’s cash reserves. He added that the current war in Gaza and its expansion into Lebanon will exacerbate the economic situation in Beirut due to the major damage to infrastructure in the south in particular, adding more burdens to an economy already burdened by crises.
And about Syrian economyHe also pointed out that the war that has been going on for years has greatly weakened the Syrian economy, as the Syrian pound has lost its entire value, and the economy has become exhausted in light of the Syrian regime’s limited control over the lands, which has prevented full benefit from the available productive resources.”
Recently he warned European Bank for Reconstruction and Developmentthat war and extreme weather affect economic growth in countries covered by the bank, noting that the escalating crisis in the Middle East exacerbates the political and economic crisis in Lebanon and harms neighboring countries such as Jordan and Egypt.
The bank stated in a semi-annual report that the downward revision in GDP growth in the region covered by the bank is slight, but it is the second downward revision in that region, which includes emerging economies in Europe, Central Asia, the Middle East and Africa.
Lebanon is under the weight of war
In a special statement to the “Eqtisad Sky News Arabia” website, the economic expert, Jassim Ajaqa, confirmed that Lebanon He faces the repercussions of the current war acutely, noting the damage to infrastructure, including Destruction of homes And the roads. He added that the devastation inflicted on southern Lebanon is a reflection of the comprehensive destruction of infrastructure witnessed in Gaza, estimating the size of direct and indirect losses in Lebanon at billions of dollars, especially with the deterioration of the conditions of vital sectors such as agriculture and tourism.
He pointed out that Lebanon suffered great losses due to the loss of economic opportunities, including the early end of the summer tourist season, which deprived the economy of vital resources for many sectors such as investment, business, and the aviation sector.
He added that the negative repercussions are expected to extend in the medium and long term, especially in light of the exposure Agricultural sector In southern Lebanon, it was bombed, which requires a long time to rehabilitate the affected lands and restore their ability to produce.
Ajaqa also spoke about the impact of the immigrant file, noting the emergence of new needs to accommodate them, whether in terms of schools or accommodation, which imposes additional pressure on the general budget due to unexpected expenses. He pointed to a more difficult scenario that Lebanon may face if Israel imposes a complete military blockade, which could lead to a shortage of three basic commodities: food, medicine, and fuel, which would be disastrous, especially with the approach of winter, which would put Lebanon in a difficult economic situation for all. Formal and informal levels.
At the level of neighboring countries, Ajaqa pointed out that: War It also affected countries such as Egypt, where it was affected Tourism sector And revenues Suez CanalJordan was also negatively affected in the tourism sector, while Syria was relying on Lebanon as a logistical base to import its needs.”
The channel lost more than 50 to 60 percent of its revenues over the past eight months, according to Egyptian President Abdel Fattah El-Sisi, who estimated the losses at more than $6 billion.
Before the end of last year, the International Monetary Fund said that the conflict in Gaza and Israel was causing enormous human suffering. In addition to the direct impact, the conflict will have serious consequences for the wider MENA region, with impacts on both people and economies.
The Fund stated that there is no doubt that Israel, the West Bank and Gaza are the most affected. But the economic impact extends far beyond the combat zone. Neighboring countries Egypt, Jordan and Lebanon are already suffering from economic repercussions. Amid concerns about the risk of escalation, visitors have canceled travel to the region, severely impacting the lifeblood of these economies. Tourism, which accounted for between 35 percent and nearly 50 percent of exports of goods and services in these economies in 2019, is a crucial source of foreign currency and employment.
The International Monetary Fund had slightly lowered its forecast for economic growth in the Middle East and North Africa region during the current year to 2.7 percent, compared to 2.9 percent in its previous estimate issued in January, in light of the pressures resulting from the continuation of the war in Gaza and tensions in shipping traffic in Red Sea.
Widespread repercussions
In a special statement to the “Eqtisad Sky News Arabia” website, the Jordanian economic analyst, Hossam Ayesh, confirmed that the ongoing war on Gaza and its extension to Lebanon, with the possibility of expanding into a regional war that includes the countries of the region and perhaps beyond, has caused negative economic, political and social repercussions on the countries of the region. .
He added that these repercussions may extend to a global scale if an expanded war breaks out that leads to the cessation of the export of oil or gas, which affects the movement of global trade, and returns the world once again to a wave of high inflation rates and high prices, which may postpone moving forward with more decisions. Reducing interest rates, the world is waiting to reduce the cost commerce And debts.
He explained that the most prominent manifestation of the economic repercussions of the war on the region is a decline Tourism activity The slowdown in economic growth, in addition to the impact on the foreign trade movement of countries in the region, has a negative impact on living standards, especially in the event of escalation of military operations and expansion of the scope of the war. He added that this situation will lead to economic stagnation and perhaps a contraction in the region’s economies, with a state of uncertainty and the suspension of various economic plans and projects, including joint Arab projects.
Regarding the Jordanian economy, Ayesh pointed out that Jordan is suffering directly from the repercussions of the war on Gaza, as tourism activity has declined and trade exchange has been affected, especially with non-Arab Asian countries such as India, which import phosphate and fertilizers from Jordan. I also backed down Jordanian exports In this area, which negatively affected economic growth, in addition to a decline in rates Investment In a big way.
He also touched on the impact on Jordan’s regional trade relations, pointing to the decline in the volume of trade exchange with the West Bank, which is suffering from the current conditions, which led to a decrease in the volume of Jordanian exports to Palestine“In addition to the negative impact on trade exchange with Lebanon.”
And he said International Monetary FundOn Thursday, the escalation of the conflict in the Middle East may have major economic repercussions on the region and the global economy, but commodity prices are still below their highest levels last year.
Julie Kozak, spokeswoman for the Fund, told a press briefing that the IMF was closely monitoring the situation in southern Lebanon “with great concern” and offered her condolences for those killed there. She added, “The potential for escalation of the conflict increases risks and uncertainty and may have major economic repercussions for the region and beyond.”
