{"id":608833,"date":"2023-10-26T00:00:00","date_gmt":"2023-10-26T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2023\/10\/26\/imf-chief-warns-of-economic-toll-of-gaza-war-humanitarian-crisis-deepens-as-fuel-supplies-run-out\/"},"modified":"2023-10-26T00:00:00","modified_gmt":"2023-10-26T00:00:00","slug":"imf-chief-warns-of-economic-toll-of-gaza-war-humanitarian-crisis-deepens-as-fuel-supplies-run-out","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2023\/10\/26\/imf-chief-warns-of-economic-toll-of-gaza-war-humanitarian-crisis-deepens-as-fuel-supplies-run-out\/","title":{"rendered":"IMF chief warns of economic toll of Gaza war, humanitarian crisis deepens as fuel supplies run out"},"content":{"rendered":"

We lead this morning\u2019s War Watch with a look at how Israel\u2019s assault on Gaza could <\/strong>impact our economy here at home. <\/strong><\/p>\n

#1- IMF chief Kristalina Georgieva thinks Egypt and the region will suffer an <\/strong>economic hit if there is a prolonged conflict in Gaza. <\/strong>\u201cInvestors are going to be shy to go to [these countries]. The cost of ins., if you want to move goods, they go up. Risks of even more refugees in countries that are already accepting more,\u201d Ahram Online<\/a> quotes her as saying at the Future Investment Initiative in Riyadh yesterday.<\/p>\n

Another spoke in the wheel:<\/strong> \u201cWhat is happening in the Middle East is happening at a time when growth is slow, interest rates are high, and the cost of servicing debt has gone up because of covid and the war,\u201d Reuters<\/a> and Bloomberg<\/a> quoted her as saying.<\/p>\n

#2- Keep an eye on our tourism targets: <\/strong>Flight bookings to Egypt, Jordan and Lebanon have plunged since the start of the conflict, according to analysis by travel research firm ForwardKeys picked up by Reuters<\/a>. Air tickets to Egypt have fallen by 26% y-o-y, to Jordan by 49%, and to Lebanon by 74%. The number of people visiting Egypt has boomed this year, with the Tourism Ministry reporting a 40% y-o-y rise in arrivals<\/a> during the first seven months of the year. The government is aiming to attract 15 mn tourists<\/a> in 2023.<\/p>\n

#3- Pundits think the EGP is being squeezed in the parallel market:<\/strong>The conflict is driving up the price of greenbacks on the parallel market, said Fitch\u2019s regional country risk head Ramona Moubarak in response to a question from Ahram Online<\/a>. Moubarak told the state-owned newspaper that \u201cnegative sentiment because of the war has weighed on the parallel market,\u201d saying she thinks the EGP is at about 46. A separate report from Sky News Arabia<\/a> puts the figure at EGP 47. <\/p>\n

Before you take media reports of parallel-market figures seriously: <\/strong>The parallel market is illiquid and opaque, and so more than a little prone to swings and exaggerations.<\/p>\n

Remember:<\/strong> The IMF earlier this month downgraded its outlooks<\/a> for the Egyptian economy and the wider MENA region:<\/p>\n