As tensions between Iran and Israel escalate into outright military war, Egypt has emerged as the African country facing the most immediate economic consequences.
With regional instability reverberating across markets, Egypt’s banking industry has been particularly severely affected, worsening an already weak economic situation.
On Friday, Egypt’s major stock index performed the worst, at one point recording the worst losses in five years.
Also the country’s currency value dropped below the 50-per-dollar threshold.
“It is no surprise that with an open-ended Israel-Iran shooting war under way, that regional markets have been pounded too, as far as Egypt, which has seen gas supplies from Israel cut off,” said Hasnain Malik, a strategist at Tellimer in Dubai.
“The spike in oil price reflects the risk of Iranian exports going offline but not serious disruption to the Strait of Hormuz, through which 20% of global oil falls.”
Futhermore, Egypt’s major stock index, the EGX 30, fell as much as 7.7% on the first day of trading since the war erupted.
All 31 publicly traded businesses reported losses while the pound traded as weak as 50.6 units per dollar, according to local-bank quotes, as per Bloomberg.
Beyond the financial markets, the turmoil has hampered Egypt’s cultural and tourist goals.
The government postponed the long-awaited opening of the $1 billion Grand Egyptian Museum, which has been in the works for over two decades and is located barely a mile from the Giza Pyramids.
The ceremony, which was scheduled to begin formally on July 3, has been pushed back until the fourth quarter, with authorities citing “current regional developments” as the cause, another report by Bloomberg highlighted.
This delay is more than just symbolic; it stifles a vital cash stream for Egypt’s tourist industry, which has long been a foundation of the national economy.
The Grand Egyptian Museum is expected to draw up to 5 million visitors yearly, resulting in a significant increase in foreign currency inflows and employment creation.
Additionally, industry insiders who spoke to Reuters, revealed that a decline in natural gas shipments from Israel led Egyptian fertilizer manufacturers to halt operations on Friday.
They said that in response to Israel’s military attacks on Iranian nuclear and missile plants, key Israeli gas sources had ceased operations.
Recent conflict between Israel and Iran
Israeli and Iranian military attacks have been fierce for the third day in a row. Targeting military, nuclear, and energy facilities in places including Tehran, Natanz, and Isfahan, Israel conducted a series of bombings deep into Iranian territory, purportedly killing key commanders and scientists and damaging missile installations.
Iran responded by attacking Israel with more than 200 ballistic missiles and drones as part of what it named Operation True Promise III.
Although many were stopped by Iron Dome, David’s Sling, and Arrow systems, dozens managed to get past defenses and hit Tel Aviv, Haifa, Bat Yam, and other locations, killing at least 10–15 Israeli civilians and injuring hundreds more.
The U.S., Russia, China, and the EU have all called for de-escalation, but with both Israel and Iran signaling determination to press on, fears of a wider regional war are growing.
Analysts warn that if Hezbollah in Lebanon, or Iranian allies in Iraq and Yemen, become more involved, the situation could spiral beyond control.
For now, the world watches closely, hoping diplomacy can still prevent a full-scale regional war.
