Mohamed Abdullah - Cairo

The continuation of the Corona virus crisis threatens to harm major economic sectors in Egypt, most of which depend on foreign cash flows from abroad.

On Thursday, the Egyptian Ministry of Health and the World Health Organization announced the discovery of a new person with the Corona virus, an Egyptian citizen returning from abroad (from Serbia through France as a transit station), and health officials in the US state of Texas announced that three new cases of the Corona virus were infected after their return from Egypt.

In an attempt to remedy the consequences of the virus spreading crisis, the Economic Ministerial Committee called for a review of a number of scenarios expected for the performance of the global economy due to Corona, and a discussion of the effects that may occur on the Egyptian economy according to these scenarios, and the measures that the government will take to counter it and reduce its impact.

The meeting also reviewed other expected scenarios regarding investor flows and the performance of global and local stock exchanges, as well as oil prices in global markets in the event of a rapid spread of the virus.

Tourism and exchange rate

The exchange rate of the Egyptian pound fell against the dollar for several consecutive days after a series of rises that started since January 2019, and the dollar rose to 15.60 pounds, an increase of about 10 piasters, with expectations that the pound would lose some gains if foreign investment declined.

Tourism experts and former officials of the island confirmed that many reservations were canceled from several European countries, amid fears of the negative effects of the virus on the tourism sector, which began to recover relatively recently and achieved 12.6 billion dollars in revenue last fiscal year.

Undersecretary of the Ministry of Tourism and former head of the hotel control sector, Ahmed Attia, revealed that canceling reservations had already started due to Corona, most of which are in the short term in March and April next, and came from four important markets, including Germany, Britain and Greece.

Attia added in his speech to Al-Jazeera Net that the tourism companies will be severely affected if the crisis persists, nor can any fines be applied to canceling reservations because the epidemic is global, indicating that the tourism sector will bear them entirely.

On the extent of the damage, he stressed that it is too early to talk about any numbers, especially with the age of the crisis not being determined, adding, "But there are repercussions that have begun to suffer from tourism and aviation companies and related tourism industries."

Tourism and aviation companies incurred financial losses due to Saudi Arabia's decision to temporarily prevent pilgrims from entering its lands, which caused the cancellation of the Umrah season (Rajab, Shaaban, and Ramadan), and Egypt ranks fourth among the nationalities of the world in performing Umrah.

A few days ago, Qatar and Kuwait imposed strict restrictions on entry from Egypt, amid fears of a decline in remittances from Egyptians abroad during the coming months, which represents the cornerstone of the hard currency after rising to $ 26 billion in 2019.

snowball

The former dean of the Faculty of Economics and Political Science, Alia Al-Mahdi, affirmed that the most affected sector will be tourism, due to its restrictions and fears of human movement and travel between countries, then the health sector, in addition to the influence of investments and foreign trade.

Alia indicated in her interview with Al-Jazeera Net that the population of Egypt lives on about 6% of its land, and therefore there is a population accumulation, and the health conditions of the majority of the population are difficult, which represents a fertile area for the spread of any disease, adding, "Despite the spread of health units in cities and villages, it is not enough ".

In turn, the economist and financial analyst Wael Al-Nahhas described the effects of the Corona virus on the Egyptian economy with a snowball that grows day after day, noting that "the impact on Egypt differs from the rest of the world."

In his speech to Al-Jazeera Net, Al-Nahhas drew attention to the decrease in the impact of indirect investments and investments in local debt instruments as a result of damage to the global financial markets, and this may lead to the recovery of part of the investments.

He added that when offering any type of bonds or debt instruments, you will not find the buyer easily. When I want to cover a debt with a debt, I must borrow and thus the borrowing wheel may stop or decline, taking into consideration the diminishing cash flows coming from real investments and the tourism sector.

The Egyptian Suez Canal Authority said in a statement last Sunday, that the revenues of the Suez Canal fell to 458.2 million dollars in the previous February, compared to 497.1 million dollars in January, as a result of the decline in global trade.