The Gaza war has already had a catastrophic impact on the Palestinian economy and has significant negative effects on neighbouring countries, especially, Egypt, Jordan and Lebanon. Before the Gaza war, Egypt’s economy was facing significant fragilities and mounting socioeconomic difficulties following the severe setbacks caused by the COVID-19 pandemic and the war in Ukraine. There were already major macroeconomic challenges, such as high budget deficits, high levels of public debt, low foreign currency reserves and significant foreign capital outflows due to the decline in investors’ confidence in the macroeconomic outlook, as well as record inflation and a rapid depreciation of the currency on the parallel market. Egypt’s reliance on fluctuating foreign earnings such as revenues from tourism, Suez Canal tolls and remittances makes it highly vulnerable to external shocks. The Gaza war has amplified these challenges, and put additional pressure on the country’s limited resources.

The United Nations Development Programme (UNDP) has released new analysis on the impact of the Gaza war on Egypt in its study titled "Potential Socio-Economic Impact of the Gaza War on Egypt: A Rapid Assessment". This assessment sheds light on the multiple impacts of the ongoing Gaza war on the Egyptian economy and society and provides insights for policy makers and stakeholders to mitigate the risks. The assessment estimates the impacts with projections for low-intensity (six-months), medium-intensity (nine-months) and high-intensity (one-year) scenarios.