2024-05-19 13:58:00
04:58 PM
Sunday, Might 19, 2024
Written by Manal Almasri:
The United Nations Improvement Program estimates that if geopolitical tensions persist, the whole financial injury to the Egyptian financial system from the Gaza struggle will attain $20 billion this and subsequent fiscal years, assuming three situations relying on the length of the struggle. .
A brand new examine launched by the United Nations titled “Attainable social and financial impacts of the Gaza struggle on Egypt” hyperlinks three situations of “low depth, medium depth and excessive depth” to the persistence of the battle in Egypt. , 9 months or a yr.
The examine predicts that within the medium and excessive severity situations, the unfavourable impression of the Gaza struggle on the Egyptian financial system will proceed till the subsequent fiscal yr 2024-2025.
Previous to the struggle in Gaza, the Egyptian financial system confronted important vulnerabilities and rising social and financial difficulties attributable to extreme setbacks attributable to the COVID-19 pandemic and the struggle in Ukraine.
The examine exhibits that the macroeconomy already faces important challenges, similar to excessive finances deficits and excessive ranges of public debt.
UN planning analysis confirms that the struggle in Gaza exaggerates these challenges and places extra stress on the nation’s restricted sources.
Egypt’s dependence on risky international revenues, similar to tourism income, Suez Canal transit charges and employees’ remittances, makes it extremely weak to exterior shocks, the United Nations reported within the examine.
financial prices over the subsequent two years
Within the first “low-severity” situation, the examine exhibits that the whole value to the Egyptian financial system will attain $5.6 billion within the 2023-2024 and 2024-2025 fiscal years, which begins on July 1, 2020.
This situation assumes a restricted escalation of the battle in Gaza lasting 6 months.
Within the “medium depth” situation, the examine estimated the impression of the struggle on Egypt’s financial system at $14.6 billion.
Beneath the “high-intensity” situation, assuming the struggle lasts for one yr and a large-scale navy escalation within the area, Egypt’s financial losses could attain US$19.8 billion.
Gross Home Product Loss
Based on the United Nations examine, Egypt’s gross home product will undergo various levels of losses beneath all anticipated situations.
The examine estimates that beneath a low-severity situation, the typical annual GDP loss might be 1.6%; beneath a medium-severity situation, the loss will attain 3.9%; beneath a high-severity situation, the loss will rise to five.2%.
A extra complete dynamic CGE mannequin exhibits an identical unfavourable impression from a 1.6% decline in core GDP in fiscal 2023-2024 beneath the low-severity situation.
Within the medium-severity situation, losses will enhance by 2.6% within the present monetary yr and attain 1.3% within the subsequent monetary yr 2024-2025.
Within the high-severity situation, losses will attain 3% of GDP in fiscal yr 2023-2024, and losses will attain 2.6% of GDP in fiscal yr 2024-2025.
excessive unemployment price
Decrease GDP development additionally implies that unemployment is prone to rise considerably and family consumption will fall, resulting in larger poverty charges.
In fiscal yr 2023-2024, the unemployment price is predicted to extend by 0.5% beneath the “low severity” situation, by 0.9% beneath the “medium severity” situation, and by 0.9% beneath the “excessive severity” situation. will rise 1.3%.
As well as, precise family disposable earnings and consumption might be under regular ranges this fiscal yr, falling by 1.3% within the “low severity” situation, 2.1% within the “reasonable severity” situation, and a pair of.5% within the “reasonable severity” situation.
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