Ceasefire in Gaza Expected to Boost Economies in Egypt and the Region
Ceasefire agreements in Gaza and Lebanon are set to positively impact the economies of Egypt, Jordan, and Lebanon.
A ceasefire agreement in Gaza, effective as of January 19, 2025, is anticipated to deliver an economic boost to Egypt and other countries in the Middle East.
This development follows a similar ceasefire agreement last November between Hezbollah and Israel.
The Suez Canal, a critical waterway for global trade located in Egypt, incurred significant losses in 2024, with estimates reporting about $7 billion in lost revenue due to regional conflicts.
Experts suggest that the stabilization of the region through the ceasefire could lead to the canal returning to regular operations, thereby enhancing economic prospects for the country.
Egypt's economy is projected to experience a reversal of the declines faced in recent years, a trend also expected in neighboring countries like Jordan and Lebanon.
According to Capital Economics, these countries have experienced economic challenges since October 2023. The new era of potential stability could pave the way for economic improvements, especially as Egypt plans to implement wage increases, raise tax exemption limits, and enhance pension contributions.
In Lebanon, economic growth is expected to follow the appointments of Joseph Aoun as President and Nawaf Salam as Prime Minister.
The region's outlook is buoyed partly due to these recent political shifts and the ceasefire agreements.
The tourism sectors in Egypt and Jordan are particularly poised for growth, according to Moody's, as the ceasefire brings renewed optimism.
Both nations depend heavily on tourism and foreign investment as crucial economic drivers, and a more stable geopolitical climate is likely to attract more visitors and investments.
With the prospect of increased revenues from tourism and the resumption of full operations in key sectors like the Suez Canal, Egypt and its neighbors are positioned for economic recovery and growth in the wake of the ceasefire in Gaza.
This development follows a similar ceasefire agreement last November between Hezbollah and Israel.
The Suez Canal, a critical waterway for global trade located in Egypt, incurred significant losses in 2024, with estimates reporting about $7 billion in lost revenue due to regional conflicts.
Experts suggest that the stabilization of the region through the ceasefire could lead to the canal returning to regular operations, thereby enhancing economic prospects for the country.
Egypt's economy is projected to experience a reversal of the declines faced in recent years, a trend also expected in neighboring countries like Jordan and Lebanon.
According to Capital Economics, these countries have experienced economic challenges since October 2023. The new era of potential stability could pave the way for economic improvements, especially as Egypt plans to implement wage increases, raise tax exemption limits, and enhance pension contributions.
In Lebanon, economic growth is expected to follow the appointments of Joseph Aoun as President and Nawaf Salam as Prime Minister.
The region's outlook is buoyed partly due to these recent political shifts and the ceasefire agreements.
The tourism sectors in Egypt and Jordan are particularly poised for growth, according to Moody's, as the ceasefire brings renewed optimism.
Both nations depend heavily on tourism and foreign investment as crucial economic drivers, and a more stable geopolitical climate is likely to attract more visitors and investments.
With the prospect of increased revenues from tourism and the resumption of full operations in key sectors like the Suez Canal, Egypt and its neighbors are positioned for economic recovery and growth in the wake of the ceasefire in Gaza.
