Egypt warned Thursday that the widening Middle East conflict is pushing its fragile economy toward what President Abdel Fattah al-Sisi described as a “near-emergency.” Speaking at a military academy event, Sisi said the regional war could trigger inflation and disrupt vital sources of national income.
Egypt has not been directly struck by the United States and Israel’s confrontation with Iran, yet the economic shockwaves are already spreading. The conflict has shaken markets and threatened shipping routes used by Egypt and its wealthy Gulf partners.
By Thursday’s close, the Egyptian pound slid to an eight-month low against the US dollar, trading at roughly 50.2. The fall followed reports that foreign investors had begun pulling short-term capital from the country’s already strained economy.
Egypt’s import-dependent system remains highly vulnerable to currency swings, with the pound losing roughly two-thirds of its value since 2022. Sisi warned that the ongoing conflict could push prices higher, intensifying pressure on households already grappling with steep living costs.
He cautioned traders against exploiting the crisis, saying those accused of price gouging could face trial in military courts. The president had earlier warned that the war could also threaten revenue from the Suez Canal, a cornerstone of Egypt’s foreign currency earnings.
Shipping companies have begun diverting vessels from regional routes, sending them instead around the Cape of Good Hope at Africa’s southern tip. Such detours could reduce traffic through the canal, deepening financial strains on the government. Sisi said Cairo was pursuing “sincere and honest mediation efforts” to halt the war before its economic toll grows heavier.
Egypt has previously hosted talks between Iran and the International Atomic Energy Agency and helped broker the Gaza truce between Israel and Hamas. However, Iran’s Foreign Minister Abbas Araghchi said Thursday that Tehran was not seeking a ceasefire or negotiations with Washington.