Egyptian Finance Minister Expects a 60% Drop in Suez Canal Revenues

At an economic conference in Cairo, Maait stated that the crisis in the Red Sea, combined with economic and trade slowdowns and the inflationary impacts of global crises, has negatively affected Egypt’s tax and non-tax revenues due to the restrictive policies implemented to combat these issues.

Minister Maait noted that because of the tensions in the Red Sea, it is estimated that Egypt’s Suez Canal revenues have decreased by about 60%, while public expenditures have increased.

Egyptian President Abdel Fattah el-Sisi had announced on February 19 that the country’s revenue from the Suez Canal, a global shipping route generating about $10 billion annually, had dropped by 40% to 50%.

The Suez Canal, one of the world’s most significant canals and straits, is the shortest shipping route between Europe and Asia and is a major source of foreign currency for Egypt.

Situation in the Red Sea Since October 31, 2023, Iranian-backed Houthis in Yemen have been seizing commercial ships linked to Israeli companies and attacking some with drones and missiles in response to Israeli attacks in Gaza.

Following the Houthis’ actions, numerous shipping companies decided to halt their operations in the Red Sea.

On December 18, 2023, the United States announced the formation of a multinational “maritime task force” called “Operation Guardian of Prosperity” with the participation of several countries to counter Houthi forces, citing the threat to global maritime trade security.

During this period, US forces have reported intercepting missiles and kamikaze drones launched from Yemen multiple times.

The European Union launched the Aspides mission on February 19 to ensure navigation safety in the Red Sea, with Italy taking on tactical command through a parliamentary decision on March 5.

Approximately 12% of global trade passes through the Suez Canal, which connects the Mediterranean Sea to the Red Sea, offering the shortest route between Europe and Asia.

source: prepared by Melisa Beğiç

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