Yemen Monitor / Newsroom:
The Houthi group has renewed its threat to target ships in the Red Sea, jeopardizing the recovery of Egypt’s Suez Canal revenues, which were expected to return to normal in the second quarter of 2025.
According to CNN, concerns are growing over repeated massive losses to the Egyptian economy due to a decline in international maritime traffic.
James Swanston, an economist at Capital Economics, stated that continued Houthi attacks would prolong the weakness in canal revenues, noting that the number of ships and shipping volumes remain approximately 60% lower than they were before the Gaza war.
The International Monetary Fund (IMF) has estimated that Egypt’s losses from the Suez Canal in 2024 amounted to around $6 billion due to these attacks.
Despite the ceasefire in Gaza in January 2025, data from the IMF’s Port Watch tool and the Joint Maritime Information Center indicate that Suez Canal traffic has not significantly improved. Many global shipping lines remain hesitant to return to the Red Sea due to fears of ship attacks.
Suez Canal revenues recorded a sharp decline in the first quarter of the 2024-2025 fiscal year, plummeting by 61.2% to $931 million, compared to $2.39 billion in the same period the previous year.
Swanston warns that if this situation persists, Egypt will face a widening current account deficit and will be forced to rely on alternative sources of capital inflows. Additionally, the weakening Egyptian pound will negatively impact both export and import sectors.
