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Roundup: Egypt strives to mitigate economic fallout from Israel-Iran war
CAIRO, June 18 (Xinhua) -- As the Israel-Iran conflict casts a heavy shadow over the Middle East, fears are mounting over its economic repercussions. In response, the Egyptian government has sought to reassure the public, affirming there is no cause for alarm.
During a cabinet meeting on Wednesday, Egyptian Prime Minister Mostafa Madbouly assured citizens that all essential goods remain available in the local market, backed by strategic reserves sufficient for several months.
Madbouly also announced the formation of a crisis committee, led by himself, to monitor the conflict's fallout.
"There is no need for concern over the availability of basic goods," he said, adding that the government continues to monitor developments at all levels and is preparing "multiple scenarios" to handle potential outcomes.
On Friday, Egypt's Ministry of Petroleum and Mineral Resources confirmed the suspension of natural gas imports from the east, referring to Israel, due to ongoing military operations.
In response, the ministry said it had activated its emergency plan for domestic gas supply.
The plan includes cutting gas allocations to some industries, maximizing fuel oil use in power plants and using diesel in some others. These measures aim to preserve the gas network and avoid power load reductions while awaiting the resumption of supplies.
Despite official reassurances, Ramadan Abu Al-Ela, professor of petroleum engineering and vice president of Pharos University in Alexandria, said Egypt is already suffering from the halt in Israeli gas supplies, estimated at 800 million cubic feet daily.
"There is global disruption due to the war's effect on gas supplies, and it's not limited to Egypt," Abu Al-Ela told Xinhua.
He stressed the need for the government to either find an alternative source to replace Israeli gas or revert to electricity load-shedding, especially with the high summer demand approaching.
He added that beyond supply disruptions, the conflict is likely to cause sharp increases in energy prices.
"Oil prices have already increased by 12 percent and gas by 7 percent in the first few days of the war," he said, warning that prolonged hostilities would further raise prices and impact multiple sectors of the economy.
The ongoing conflict began with Israel's massive strikes on Iran on June 13. The escalation has fueled regional and global concerns over the potential for a broader, economically devastating confrontation.
Khaled El-Shafey, an economist and head of the Cairo-based Capital Center for Economic Studies and Research, warned that the conflict would disrupt trade and drive up prices.
"With the continuation of the war, we will see a slowdown in trade, disruptions in supply chains, and other negative repercussions," he said, noting the impact is not limited to Egypt.
"Suez Canal revenues are also declining, and shipping and commodity costs are rising. This will have real impacts," he added.
Mohamed Othman, head of the Cultural Tourism Marketing Committee in Upper Egypt, warned of the war's effect on the tourism sector, a cornerstone of Egypt's economy, but hoped it would not lead to a prolonged slowdown.
He noted that Egypt had seen record visitor numbers recently, with high expectations for continued growth in 2025. "We hope the tensions won't derail this momentum, as the world cannot afford more wars," Othman said.
