A report indicated that the neighboring countries of Israel, namely Egypt, Jordan, and Lebanon, are facing economic crises since the outbreak of the war between Israel and the Palestinian "Hamas" movement during the current month of October.

Ajay Banga, the President of the World Bank, warned during the "Future Investment Initiative in Saudi Arabia," held in Riyadh this week, that the war is placing economic development at a "serious turning point," according to his statement.

Economic Pressures in Egypt

The report published on the "Fortune" website noted that "the President of the European Council, Charles Michel, met with the International Monetary Fund last Thursday and told the officials there that they need to do more to support the Egyptian government, which he said is under pressure due to the potential influx of migrants from the Gaza Strip, as well as people fleeing the civil war in Sudan."

Michel continued to reporters: "Let us support Egypt; Egypt needs our support, and we need to support Egypt."

In April, the International Monetary Fund concluded that "Egypt's financing needs for 2023 are equivalent to 35% of its GDP," and on October 5, the "Moody's" agency decided to downgrade Egypt's debt rating, which was already in a distressed state. This downgrade came amid the failure of previous efforts to assist the Egyptian economy, which was burdened with debts amounting to about $160 billion by the end of last year.

The Worst Economic Crisis

Merit Mabrouk, the director of the Egyptian Studies Program at the Middle East Institute, stated that "Egypt is going through the worst economic crisis I can remember in at least five decades, and this only complicates the current disruptions caused by the war."

She added: "If you have this fire in Gaza, you need the rest of the region to be stable so that everyone can take the appropriate and correct action; you do not need more instability in an already unstable area."

Mabrouk pointed out that "one direct sign of increasing distress is that the Central Bank of Egypt imposed foreign currency restrictions last week on cards linked to local bank accounts."

The report stated that "one of the potential major setbacks for Egypt, resulting from the recent war between Israel and 'Hamas,' is the loss of tourists seeking to explore the ancient pyramids and the country's history, especially since tourism is one of the leading economic sectors in Egypt, providing, alongside foreign investment, the necessary access to the rest of the global economy."

Jordan's Debt

Jordan, neighboring Egypt, is also facing difficulties due to slow economic growth and decreasing foreign investment, according to the International Monetary Fund.

The financial data provider "FactSet" states that "Jordan's debt outlook is better than that of Egypt, but its unemployment rate exceeds 10%."

Lebanese Economic Contraction

The size of the Lebanese economy shrank by more than half from 2019 to 2021, according to the World Bank, as the Lebanese pound, which was pegged to the US dollar since 1997 at 1,500 Lebanese pounds to the dollar, is now trading around 90,000 pounds per dollar.

Many businesses in Lebanon have resorted to charging fees in dollars, while public sector employees who still receive their salaries in Lebanese pounds have seen their purchasing power collapse, as many are now relying on remittances from relatives abroad to survive.

In April 2022, the country's leaders reached a preliminary agreement with the International Monetary Fund on a bailout package, but they did not implement most of the required reforms to finalize the deal.

IMF Warning

The International Monetary Fund warned in a report earlier this year that "without reforms taking place within Lebanon, the public debt of the crisis-ridden state could reach nearly 550% of GDP."

Before the recent war between Israel and "Hamas," some officials pointed to a rebound in Lebanon's tourism industry as an economic lifeline, but as the conflict threatens Lebanon, with regular small-scale clashes between the Lebanese "Hezbollah," allied with "Hamas," and Israeli forces at the southern border of the country, foreign embassies have warned their citizens to leave, and airlines have canceled their flights to Lebanon.

Paul Salem, the President of the Middle East Institute in Washington, stated, "If the tensions extend to the Gulf, this conflict has the potential to significantly impact international markets and economies and struggling populations around the world," according to the report.