Fitch expects to expand the International Monetary Fund’s program for Egypt (Reuters)
Fitch Ratings said that the broader repercussions of the conflict in the Gaza Strip increase the risks facing neighboring countries.
She added that the long-term war in Gaza and the associated spread of the conflict to neighboring regions increases the risks facing countries in the region, especially Egypt, according to what Reuters reported.
Fitch indicated that the intervention of the Yemeni Houthi group also highlighted the possibility of the repercussions of the Gaza war developing “in ways that are difficult to predict.”
She expressed her belief that foreign partners may be willing to increase support to Egypt in response to the repercussions associated with the conflict, and expected that its International Monetary Fund program would be expanded.
Egypt is currently holding discussions with the Fund regarding a loan program worth $3 billion, as its officials visited the country in recent days.
Jan Friedrich, managing director and head of Fitch for Europe, the Middle East and Africa, warned that the Red Sea turmoil could exhaust Egypt.
Friedrich added - during the "Credit Outlook" conference organized in Dubai - that the disturbances reduced traffic rates in the Suez Canal by 70% in the first weeks of 2024, at a time when the canal's revenues recorded $9 billion last year.
He added that if the attacks continue, they will be a drain on a country that is already suffering from a very difficult external situation, while the regional impact can still be relatively controlled, he said.
What about Jordan?
Fitch said today that it does not expect Jordan's energy, water and food supplies to be significantly affected by the situation in the Red Sea.
She added: "We expect Jordan's external financing position and external balances to remain consistent with its latest credit rating."
Last Wednesday, the Jordanian government announced measures to deal with what it called “potential inflationary pressures” resulting from the Israeli war on the Gaza Strip and the disturbances in the Red Sea and Bab al-Mandab.
A statement by the Jordanian Ministry of Industry and Trade stated on Wednesday that these measures aim to preserve food stocks and the regularity of supply chains in the Kingdom, and to ensure price stability and market control, especially before and during the month of Ramadan.
The ministry said, "The measures included setting ceilings for container prices for the purpose of estimating and calculating customs duties to reduce the cost, keeping it as it was before October 7, 2023."
Last December, the Jordanian government banned the export of basic food commodities such as sugar, rice, and vegetable oils, to preserve stocks and provide the necessary quantities to the local market.
Source: Al Jazeera + Reuters