Regional tensions deal blow to Egypt’s economy and tourism industry

Escalating hostilities between Israel and Iran over the weekend have rattled Egypt’s economy and dealt a blow to its crucial tourism sector.

The Egyptian pound weakened against the U.S. dollar and the country’s stock market suffered its steepest single-day drop in five years, according to Bloomberg. Investor confidence also took a hit, with approximately $500,000 withdrawn from Egypt’s domestic debt markets.

Egypt’s heavy reliance on imports makes it especially susceptible to regional instability. Compounding the problem, Israel reduced output at its largest natural gas field on Friday, cutting exports to Egypt. This forced Egyptian authorities to ration supplies at some facilities and switch to diesel at several power stations.

Tourism, a vital economic pillar for Egypt, has also been disrupted. The UK’s Independent reports that thousands of British travelers were rerouted over the weekend due to airspace closures prompted by missile strikes. Several flights were canceled.

The UK’s Foreign Office updated its travel advisory on Friday, warning:

“Ongoing hostilities in the region and between Israel and Iran could escalate quickly and pose security risks for the wider region. There are reports of military debris falling in various locations.”

Despite the unrest, the UK still considers major tourist destinations such as Cairo, Luxor, Aswan, Alexandria, Sharm el-Sheikh, and Hurghada safe for travel.

In light of the uncertain environment, Egypt has postponed the long-awaited opening of the Grand Egyptian Museum to the fourth quarter of the year, citing “current regional developments.” It was scheduled to open on July 3^rd.