This analysis was written as part of a Special Report on the repercussions of war across six polities from October 7^th, 2023-December 2025

Since the Gaza war began in October 2023, Egypt has found itself between regional violence, economic fragility, and diplomatic tension. Its economy, shaped by strong state control, a powerful military and a struggling workforce, cannot be separated from the wider conflict. Yet despite its sensitive regional position and its multi-tiered diplomatic and strategic exposure, Egypt has not faced significant physical destruction or evident direct economic losses from the start of the war up to the first nine months of 2025, though the United Nations Development Programme (UNDP) released a May 2024 Rapid Assessment of potential socioeconomic impacts of the Gaza war on Egypt, basing their assessments on three scenarios ranging from contained to regional war. Estimated economic impacts on Egypt in these scenarios ranged from $5.6 billion to $19.8 billion. Although the third high intensity conflict scenario did not materialize in full, certain aspects of it, such as a direct confrontation between Israel and Iran, were realized. Still, the major impacts on oil, gas, tourism, and major long-term trade disruptions that warranted the $19.8 billion estimate have been largely avoided.

Economic indicators for Egypt do not reflect significant impact of the regional conflict scenario of the past year and nine months. According to International Monetary Fund (IMF) estimates from July 2025, debt-to-Gross Domestic Product (GDP) ratio narrowed by about 10 percentage point in the 12 months to June 2025, reaching 86 percent. Egypt’s ongoing debt burden and other economic weaknesses are not considered linked to the regional conflicts in Israel, Palestine, Lebanon, and Syria, and in fact the IMF projected a four percent real GDP growth in 2025. While conflict-related financial burdens affected each of those countries in specific ways, analysts link Egypt’s debt and other indicators of the country’s problems to escalation of homegrown crises of the 2010s, the 2000s, and even earlier.

The IMF instead highlights improvements in the Egyptian economy and social stability in the past 12 months. These positive signs include unemployment rates around 7 percent. While social safety nets also were bolstered over, significant drops were recorded in both headline and consumer price inflation rates. 

Indirect conflict impacts

Rather than territorial battles and losses of military and civilian lives, the challenges faced by the Nile government unfolded on multiple economic and political fronts, a large amount of which are indirectly linked to what many consider the seventh Arab-Israeli armed conflict (October 2023-2025).

Sectors of the Egyptian economy and projects considered important for national development have been affected, including the long delayed full opening of the billion-dollar Grand Egyptian Museum (GEM), designed to attract five million annual visitors. However, the main source of revenue pressure in 2024 steamed from the Suez Canal passing, which manifested mainly in the first half of 2024.   

Sectors from energy to weapons manufacture were also affected, alongside strains on socioeconomic peace and elevated costs for policing and opinion influencing. An as yet incalculable array of emerging risk factors related to dichotomous popular sentiments, political attitudes, populist agitation, refugee inflows, and future displacement dangers.

The primary political and humanitarian sensor of the conflict was the Rafah crossing, the only access to Gaza not fully under Israeli control and is operated by Egypt (in political and security accords with Tel Aviv). At time of this report, Egypt’s humanitarian burden along its Gaza border has kept growing, with tens of thousands of Palestinians seeking refuge. El-Sisi government played a key role in facilitating the Gaza agreements of October 2025, the country’s post-1978 role as a mediator and regional stabilizer had been complicated by domestic pressures, geopolitical maneuvering, and the shifting priorities of its traditional allies.

Rafah border: humanitarian lifeline and political minefield

Rafah is the only non-Israeli crossing point between Gaza and the outside world, and it is located near the southeast extremity of the Sinai Peninsula in Egypt. For Palestine’s private sector economy, the crossing serves as a vital trade corridor and for Egypt, it has provided marginal trade opportunities. The Cairo government has been using it as a strictly controlled pressure valve for decades, opening and closing it based on domestic politics, diplomatic situations, and security assessments.

Moreover, Rafah has become a pivotal challenge for Egypt’s regional responsibilities and its internal security concerns. Immediately after the beginning of Israeli military actions in 2023, the Egyptian government positioned Rafah as a humanitarian relief hub rather than a mass shelter. To this end, Cairo permitted a limited number of relief convoys to enter Gaza in cooperation with the UN, the Egyptian Red Crescent, and Gulf state donors like Qatar and the United Arab Emirates.

Between November 2023 and May 2024, more than 80 percent of humanitarian supplies that reached Gaza entered through Egypt, until May 2024, when Israeli forces undertook ground incursions of the Gazan side of the Rafah crossing.

Justified by Israel as a tactical necessity to destroy Hamas infrastructure, the takeover of the crossing was seen as an outright insult to Egypt’s logistical control. With its role as a key arbiter of humanitarian access undermined, Cairo accused Israel of breaking long-standing agreements and unilaterally changing the rules of humanitarian coordination. And within hours, it closed its side of the crossing.

UN agencies warned of catastrophic situation in Gaza, as medicine and fuel ran extremely low. Despite intense efforts of Western and Arab diplomats to find a workaround for opening, Egypt refused to reopen Rafah until it could do so without being seen as allied in Israel’s southern campaign. Furthermore, in order to block Palestinians from being displaced onto its territory, Egyptian officials instead called for the creation of an internationally monitored aid distribution system.

Emergency analysis has showed that Egypt lacks the resources to take in a sizable number of Gazan refugees. Even limited assistance for displaced people in Sinai might cost hundreds of millions of dollars, according to UNDP’s assessment in May 2024, funds that Cairo just does not have.

President Abdel Fattah el-Sisi confirmed that Egypt, of whose population refugees composed about 9 percent as of 2022 according to the International Organization for Migration, is not ready to provide the emergency housing, food distribution, healthcare, and educational infrastructure needed to host 100,000 displaced Palestinians. El-Sisiwarned in a number of public statements that resettling Palestinians in Sinai would “liquidate the Palestinian cause” and violate Egyptian sovereignty.

The security risks posed by a potential Hamas presence in Egypt, and its links to the Muslim Brotherhood, are perhaps the primary deterrent to opening the Egyptian border to Palestinians. Cairo’s opposition to having Gazan people mass-displaced onto Egyptian territory stems from a multi-layered and complex fear that permitting a massive influx of Gazans into Sinai might become a long-term attribute or sideshow of the Israeli-Palestinian conflict. Hence, the Egyptian government in 2024 focused on building a new large buffer zone along its border with Gaza. Located near the Rafah crossing and extends several kilometers into North Sinai. Satellite images analyzed by US-based tech company Ventor (formerly Maxar Technologies) and confirmed by Egyptian officials, showed cleared land and newly built infrastructure.

Refugees, social services, and the Sinai strain

Despite national efforts to curb refugee influxes, roughly 100,000 Palestinians entered Egypt between October 2023 and June 2025 according to the Palestinian Authority’s embassy in Cairo, either through unofficial routes or with special permissions for humanitarian needs, family reunions, or medical care. The majority settled in North Sinai, particularly around the cities of Rafah and Arish.

A combined UNDP and World Food Programme (WFP) rapid assessment in May 2024 found that the influx of displaced people contributed to a more than 40 percent increase in food insecurity in border governorates. Based on analysts’ preliminary assessments, providing basic services to a huge number of refugees would be very costly to Egypt, as well as concerning capital investment in infrastructure or long-term integration costs.

With a fiscal deficit exceeding five percent of GDP, and with debt servicing that account for a third of its national revenue, the country’s direct economic exposure to Israeli military measures of the past two years is not as large as the exposures of Palestine, Lebanon, and Syria.

While Egypt has received aid and logistical support from Gulf states and international agencies, including a $35 billion investment package from the United Arab Emirates in February 2024 and $8 billion in financial aid and investments from the European Union in March 2024, long-term funding mechanisms have not yet been established. Regarding proposals to relocation of Gazan residents, no amount of funding could disperse with the illegality of such measures or is seen as a solution by the country’s government. Egyptian Foreign Minister Badr Abdelatty reaffirmed in a 2025 interview with CNN that “the displacement of Palestinians from the Gaza Strip is a ‘red line,’ Cairo will not permit anyone to jeopardize Egypt’s national security or sovereignty.”

Suez Canal, inflation, and foreign exchange

For Egypt, the Suez Canal is a national asset and a vital component of economic sustenance. Generating over $9 billion in revenue annually, it has long been a significant source of foreign currency for the government.  As a route for almost 12 percent of worldwide trade and a link between the Mediterranean and the Red Sea, the Suez Canal also highlights Egypt’s strategic position in maritime trade routes.

But the Gaza war weakened this strategic advantage. One of the most direct and expensive effects of the regional escalation for Egypt has been the disruption of Red Sea marine trade. Houthi attacks drove international shipping companies rerouted vessels away from the Red Sea and the Suez Canal. Revenue fell year-on-year by around 47 percent in January 2024, and maritime traffic fell 30 percent. These numbers represent the highest decline in canal revenue for more than ten years; big international shipping companies like Maersk and Hapag-Lloyd ceased transits in the Red Sea.

The consequences were immediate. Egypt found itself in a financial dilemma as it relied on consistent Suez traffic for jobs and foreign exchange along the canal corridor.  Egypt had officially inaugurated a major expansion of the Suez Canal, known as the “New Suez Canal,” in August of 2015. This project involved digging a new 35-km (22-mile) lane and deepening/widening other sections to allow two-way traffic, significantly increasing the canal’s capacity. Subsequent, smaller expansion projects, such as widening 10 kilometers in the southern section, were initiated in 2022 and completed in 2023. 

Based on expected earnings under normal circumstances, cumulative losses throughout the first half of 2024 were estimated to be above $6 billion. Egypt experienced a currency crisis in 2023-2024 fueled by the economic fallout from the war in Ukraine, which raised food and energy import costs, the Gaza conflict’s impact on Suez Canal revenues, and high external debt payments.

This adverse event came during a period of economic vulnerability for Egypt, with high levels of external debt, a widening trade deficit, and inflationary pressures. According to UNDP rapid assessment inflation of 23.5 percent in 2023 and projections of reaching 32 percent the following year. Additionally, in March 2024, the Central Bank let the Egyptian pound to freely fluctuate in accordance with the guidelines established by the International Monetary Fund (IMF), resulting in a nearly 60 percent devaluation, followed by a spike in the cost of fuel, imported commodities, and staple foods.

The IMF agreement and Egypt’s fiscal straitjacket

Egypt’s obligations to the IMF have further strained its economic independence. The country signed with the IMF a $3 billion Extended Fund Facility in December 2022 to stabilize its macroeconomic structure.

However, the initiative was significantly expanded as a result of adverse shocks, such as the conflict in Gaza, the Houthi attacks in the Red Sea, and associated revenue losses. Under the updated agreement, Egypt committed to a tighter fiscal consolidation route including lowering the budget deficit, permitting exchange rate flexibility, and eliminating untargeted subsidies.

However, returns have been severely constrained by geopolitical instability, currency devaluation, and global investor caution. Formerly willing to provide Egypt with financial support, nations like the United Arab Emirates and Saudi Arabia have taken a wait-and-see attitude, urging Cairo to increase transparency before making any commitments.

In July 2024 assessment, the IMF praised Cairo’s efforts but cautioned that growing external vulnerabilities and geopolitical uncertainty could derail the program. Egypt’s geopolitical strategy imposes an unspoken but constant restriction, because IMF agreements and Gulf investments would be threatened if it hosted Palestinian refugees that could be close to Hamas. In summary, the geopolitical fine print that comes with every dollar of foreign assistance, in addition to IMF spreadsheets, reinforces Egypt’s fiscal constraints.

Furthermore, reform also became more politically costly. Public outrage aroused by the removal of food and fuel subsidies as inflation squeezed households. Despite pressure from the IMF, the government postponed multiple rounds of subsidy cuts that were planned until mid-2024. The fiscal balance was further strained by the announcement of new social protection measures and wage increases for public sector employees.

Sectoral impacts: tourism, trade, and energy

Although Egypt is geographically remote from the conflict’s center, its border with Gaza, Red Sea attacks and extensive media coverage have affected the safe travel destination in the first months of the war. Regional unrest may severely impact tourism, which had been still rebounding from the COVID-19 pandemic. Nevertheless, the World Travel & Tourism Council, reported 2024 as Egypt’s highest tourism contribution to the economy with 2025 projected to reach a new peak. As of this writing, tourism remains a cornerstone of the national economy representing about 8.5 percent of its GDP.

The logistics and trade industries faced a series of challenges. As noted above, container traffic through the Suez Canal drastically decreased as Houthi drone and missile attacks made routes insecure. Outside of the area of transshipments, exporters experienced delays threatened supply agreements, and importers were disproportionately affected by higher freight costs. Logistics and shipping costs increased overall due to rising insurance premiums, with some experts estimating not only million-dollar added costs for each rerouted cargo vessel but also more negative climate balances.

In the energy field, Egypt has strengthened its ties with Israel, with whom its peace treaty of 1979 still stands, despite growing anti-Israel sentiment and public outrage following the Gaza War. Cairo and the Israeli firm NewMed signed a historic $35 billion deal in August 2025 to triple gas supplies from the Israel’s offshore Leviathan field. This arrangement comes as Egypt’s domestic gas production has dropped by over 40 percent since 2021, increasing dependence on imports at a time when its foreign reserves are running low.

Also, gasoline subsidy costs rose with global oil prices. Egypt remains a net energy importer. Currently, more than half of its imports and up to 20 percent of its overall consumption come from Israeli gas. In addition to providing a temporary economic lifeline by reducing energy shortages and stabilizing prices, the agreement represents Cairo’s long-term strategic investment on regional integration rather than symbolic political division, which is interpreted by observers as proof of the long-term significance of agreements in the spirit of the agreements signed since 2020 by other countries in the Gulf and North Africa (Bahrain, UAE, Morocco, Sudan) with Israel that known as the “Abraham Accords”.

Impromptu consumer behaviors and alleged labor impacts

In terms of Egyptian consumer responses, the Gaza conflict led to a widespread boycott of Western and companies thought to be Israeli-affiliated. The movement has had noticeable economic consequences despite being primarily a means of public opinion and political expression. Boycotts on international enterprises contributed to the growth of local Egyptian businesses, especially in the food and beverage industry, with reports indicating that certain domestic brands such as Egyptian soft drink labels have heavily benefitted from consumption surges.

This movement, while driven by opposition to Israeli interventions in Gaza, aligns with Egypt’s larger localization and industrialization objectives, which promote local production despite often-voiced doubts about the long-term scalability and global competitiveness. However, the economic impact is not entirely positive. Several boycotted enterprises are major employers, raising concerns that sudden decline in sales could result job losses or violation of workers’ rights. This highlights how consumer activism can affect economic stability and civil unrest, in a country already facing high unemployment and financial pressure.

The costs of Hamas intrusion into Israel in October 2023, the two years of domicide in the enclave, and the wider regional confrontations, measurably weighed on Egypt but less than the burdens created over the past 40 years under the country’s erratic economic policy making.

The theoretical post-conflict scenario of rebuilding Gaza under the regime of a transitional Palestinian government, supervised by an international “Board of Peace” and an “International Stabilization Force”, would have both burdens and benefits economic impact on Egypt. It could persist in areas from refugee care and Suez Canal receipts to tourism receipts and serving as gateway in humanitarian deliveries, trade and reconstruction. Egypt’s potential role in reconstruction was on display during the March 2025 Arab Summit for Palestine held in Cairo at the request of Palestine, where Arab leaders pushed for a permanent ceasefire and two-state solution, and approved an (as of yet unfulfilled) Egyptian-led plan to create a technocratic committee to temporarily govern and reconstruct Gaza.

Domestic cost factors will likely include keeping internal unrest under control. Domestic social unrest and negative international reputation have both been enhanced (albeit not caused primarily) by the blocking of the Gaza aid protests along with other nondemocratic actions of the Sisi administration over the past decade. Moreover, the domestic social and global reputational repercussions of operating a state apparatus that is regarded as repressive by international civil rights advocacy organizations, hinting at the strong possibility of Egyptian economic cost factors that are related to the Gaza conflict but have not yet been assessed.  

This analysis was written as part of a Special Report on the repercussions of war across six polities from October 7^th, 2023-December 2025

Jordan has not reported destruction and direct economic losses either immediately after the attack of October 7, 2023, or in the two years after. However, the Hashemite’ Kingdom’s economic structure and geopolitical position rendered it exposed to the war between Israel and Hamas. Jordan had a diplomatic and humanitarian role in the conflict, including airdropping aid and keeping a field hospital in Gaza. From the beginning of this war, Amman has consistently opposed any plan to move Palestinians from Gaza or the West Bank into its territory and has withdrawn its ambassador from Israel in protest of the military action. Although being its neighboring country, the government stated that no Palestinian refugees entered its territory as a result of the conflict apart from those admitted for medical treatment.

The war has had a significant impact on Jordan’s society and caused losses to the economy despite the country’s lack of military involvement. These effects include trade disruptions caused by Red Sea instability, temporary drops in tourism from 2023 through 2025, unquantified consumer market shocks from boycotts—countered in part by increased consumption of locally manufactured goods, uncertainty, and both financial and diplomatic pressure from its reliance on outside funding particularly from the United States (though the 2025 dismantling of the United States Agency for International Development caused multi-sector shocks across the country—which had been the third-largest recipient of USAID from 2021-2025) and European Union. The conflict’s reported human cost of over 67,000, mostly civilian deaths and 169,000 injuries on the Palestinian as of late 2025, has deeply influenced Jordanian public opinion and political dynamics, resulting in protests and demands to stop any cooperation agreements with Israel.

Macro-impacts and aerial disruptions

Before the onset of the Gaza conflict, Jordan was still recovering from the COVID-19 pandemic. According to International Monetary Fund (IMF) data, real Gross Domestic Product (GDP) growth, which had been negative at -1.1 percent already in 2019, recovered to 3.1 percent in 2023, a new peak since 2010. This was due to tourism sector expansion, gradual development in external demand, and fiscal consolidation that supported inflation stabilization and regained investor trust. However, this trajectory was disrupted in October 2023 when the Gaza war broke out and instability began to spill over into neighboring countries. The IMF reported that in 2024, Jordan’s real GDP growth slowed to 2.5 percent.

The economic spillover was first felt in the tourism sector, one of Jordan’s primary sources of foreign currency. According to the Ministry of Tourism and Antiquities, by the end of the first quarter in 2024, visitor numbers had dropped by 3.9 percent and tourism receipts had fallen by 2.3 percent compared to the year before. This decline was associated with North American and European travelers’ security concerns and broader regional disruption in mobility affecting schedules of airlines and cruise ships. Airspace closures April and October of 2024 as well as June 2025, taken as a precaution amid Israel-Iran missile exchanges, added further uncertainty and temporarily disrupted connectivity.

Additionally, it must be assumed that some direct military costs incurred for the government in Amman, although there is no specific data on the cost of national air‑defense systems intercepting Iranian drones in Jordanian airspace.  

Looking ahead, the IMF’s 2025 World Economic Outlook projects a 2.6 percent real GDP growth in Jordan by 2025, assuming no further escalation of the war and stabilization of external trade. Any disruptions in Red Sea shipping or any new political tensions could, however, easily drag growth below projections. Other than risks for trade and tourism as key sectors in the Jordanian economy, the nation’s economic structure and its reliance on foreign aid—particularly to organizations that support Palestine but are based in Jordan such as the United Nations Relief and Works Agency for Palestine (UNWRA)—increase its vulnerability to resurgence of regional conflicts, which at time of this analysis cannot be excluded, and to geopolitical developments in general.

Beyond costs incurred due to nearby conflicts and regional uncertainty, there is also a considerable domestic cost associated with Jordan’s diplomatic stance that incurred popular wrath. The Gaza conflict and the Israeli actions in the enclave in the past two years resulted in large nightly protests in Amman and other major cities, reflecting a rise in public opposition to any form of cooperation with Israel.

At the same time as being faced with irate voices in its populace, the government in Amman managed a difficult diplomatic dance of avoiding diplomatic confrontation with international powers that are of strategic importance for its economy. It offered support to the Gazan people through deliveries of humanitarian aid, by taking strong and consistent positions of supporting a Palestinian state in international forums, and by supporting legal action at the International Court of Justice after publication of the 2024 ICJ advisory on the illegality of Israel’s occupation.

Although Jordan was able to absorb economic disruptions related to the Gaza conflict and keeping armed confrontations outside of its borders, the Hashemite Kingdom’s has had to balance conflict potentials that can erupt in the short or long term. Continued Israeli military presence in South Lebanon over the past 12 months has been noted in international media as a “rolling war,” and the continual ceasefire violations and what more than 20 UN-appointed expert observers refer to as the “militarized control” over Gaza, in conjunction with a West Bank regime enacting what the UN High Commissioner for Human Rights refers to as “systemic discrimination and “systemic asphyxiation” of Palestinian rights, can be called a perma-crisis. Under such conditions, Jordanian long-term growth remains subject to future iterations of internal fault lines, unrest, and even strife. Jordan’s flexibility in foreign partnerships would severely suffer in such a scenario, and external cooperation agreements with Israel on water and energy may be further disrupted, two areas vital to its economic and environmental security.

Socio-economic losses and humanitarian consequences

During the Gaza conflict, Jordan maintained strict border control, and did not open its borders to any new influx of refugees from Gaza or West Bank communities targeted by hostile settlers, despite the Kingdom’s shared border with the occupied West Bank. This special vigilance at the time of intense conflicts within the neighboring territories is widely seen as reflecting both security considerations and political sensitivities rooted in Jordanian history.

Vigilance combined with humanitarian and diplomatic support for Palestine were part of the Kingdom’s socioeconomic balancing act between popular pressures and economic survival. Under this calculus, the Jordanian population was spared recurrence of the per-capita cost burden of new refugee camps and large-scale displacements seen in the past decade. Jordan was also spared military destruction and damages, apart from the minor damages incurred by the accidental fall of drones on civilian infrastructure. But estimations of economic losses, and specifically conflict-related negative impact on per-capita incomes and familial livelihoods, have neither risen to the top of global attention nor to highest analytical precision.  

In a preliminary estimate of the Gaza conflict’s economic repercussions on the three countries of Jordan, Egypt, and Lebanon during the first three months of armed violence in Gaza, a joint assessment by the United Nations Development Programme (UNDP) and the United Nations Economic and Social Commission of Western Asia (ESCWA) put the negative GDP impact at $10.3 billion for the three countries. A projected USD $18 billion loss for 2024 was later invalidated by escalations in Lebanon. Jordan-specific estimates remain imprecise but point to reduced government revenue, delayed infrastructure investment, and slower progress on social protection, education and healthcare.

Sectoral impacts and opportunity costs

Tourism’s dip and rise

According to Ministry of Tourism and Antiquities quarterly review, Jordan’s tourism aggregates in 2023 did not suffer from regional instability but showed increases vis-à-vis the preceding pandemic as the number of visitors improved and tourism receipts increased by 25.8 percent from 2022. However, looking at the period between November 2023 till September 2024 when global headlines were filled with daily coverage of the Gaza conflict, tourism aggregates shifted and expected sectoral revenues of $530 million were not realized according to the Ministry’s quarterly review. Even as visitor entries from the Arabian Gulf region increased, the number of visitors was considered low, as fewer international visitors entered. 

While the overall decline in visitor arrivals and tourism receipts in 2024 was minor, tourism and hospitality operators reported changes in cruise ship itineraries away from Aqaba, Jordan’s only port, and flight suspensions at Amman’s Queen Alia airport, which in 2024 saw a single-digit percentage contraction in passenger numbers alter two years of growth. The temporary contraction of visitor numbers affected local businesses, seasonal workers, tour guides, and transport operators. It did not, however, impede medium-term growth of Jordan’s inbound tourism as shown in a strong rebound in tourist arrivals already in January and February of 2025. Over these two months, Jordan recorded the highest number of tourists and receipts since 2010. According toMinistry of Tourism and Antiquities, the country’s tourism revenue for the first quarter of 2025 reached $1.72 billion, a year-on-year 8.9 percent increase.

Trade route disruptions

Accounting for one third of the country’s imports and about half of exports, Jordan’s Port of Aqaba plays a vital role in the country’s trade infrastructure. Attacks were initiated in October 2023 on the vital Gulf of Aden and Red Sea shipping lanes by Yemen’s Houthis, part of the “axis of resistance” that entered the Gaza conflict by attacking Israeli and allegedly Israel-linked targets.  Vessel rerouting around the Cape of Good Hope increased fuel and insurance costs and created inflationary pressures for Jordanian producers and consumers.

To mitigate this trade disruption and avoid major drawbacks, the Jordanian government set a temporary exemption on sales taxes and custom duties on maritime shipping costs in January 2024. Al-Aqaba port import and export levels have nonetheless declined dramatically.

Land-based trade across Jordan’s western border has also been impeded. Since the Gaza war escalated, cross-border trade via the King Hussein /Allenby Bridge, Jordan’s primary commercial crossing with the West Bank, has initially remained open and facilitated bilateral trade (albeit 3:1 disparate in favor of Jordanian exports) between Jordan and Palestine at a reported level of above $400 million (2023) but has become more vulnerable.

Following a September 2025 incident where a Jordanian truck driver killed two Israeli soldiers at the crossing point, Israeli authorities closed the Allenby Bridge “indefinitely.” Despite a partial reopening at the end of the same month, forward looking implications for trade are significant, albeit shrouded in uncertainty due to the overall situation. According to records of recent years, a closure has repercussions on deliveries of humanitarian aid shipments to Gaze. About a quarter of the food, tents, and other essential supplies that were sent to Gaza via the UN 2720 mechanism in August 2024 went through Jordan.

A drop in GDP growth rates for Jordan in 2024 from 2023 seems to be signaling the extent of the country’s direct and indirect economic losses from two years of war over and on Gaza. This impact may be recovered organically by GDP growth returning to higher levels, as per IMF projections.  Although no consolidated numerical value of the cumulative economic cost to Jordan’s trade and tourism sectors is available, it has to be concluded that both sectors represented the primary channels of conflict-related impact on Jordan in the past two years.

Boycotts, public strikes and consumer behavior

A locally significant, and highly publicized, behavioral economic and social impact of rising Pro-Palestine and Anti-Israel sentiments of Jordanian consumers occurred by way of an increasingly active consumer boycott movement targeting global food and beverage companies that are considered pro-Israel. Boycotting international companies, alongside public strikes, was a way for Jordanians to show support for Palestinians. Local advocacy organizations, civil society networks, and social media platforms helped expand the campaign, turning individual consumer choices into a political and economic statement. While some demand shifted to locally produced goods and local firms, Jordan’s high import-reliance meant that supply chains, packaging, distribution, and franchise operations were negatively impacted. Boycotts have a long history, and while being both ardently declared and denied or met with counter campaigns, their economic impact comprised of supply chain and brand reputation effects, has historically been near impossible to predict.

When energy imports are interrupted

According to the World Integrated Trade Solution, a World Bank platform for trade and tariff data, Jordan’s internal consumption was 57 percent import-dependent in 2023, with food and energy as the sectors with the largest share of imports. Jordan generates a significant portion of its electricity from natural gas, which is mainly imported from Israel and Egypt. The Arab Gas Pipeline, a transregional national gas pipeline that runs from Egypt through Jordan and Syria, has seen disruptions in its flows since the late 2023 regional instability. In the previous decade from 2010 to 2019, which is noted by the Jordanian government as a period of low GDP growth, the kingdom’s energy sector had to grapple with planning and implementation of its first green growth vision and rollout of renewable energy plants, growing domestic power demands and increased generation costs while citizens were faced with contentious reforms to electricity subsidies. Fiscal burdens of the energy sector increased with costly impacts on electricity pricing and public spending.

Furthermore, Jordan’s sustainable freshwater resources are less than 100 cubic meters per person annually, considered far below the worldwide water poverty line as projected in a United Nations International Children’s Emergency Fund (UNICEF) 2025 report.

As the kingdom’s new water and energy nexus was shaped in the 2010s (juxtaposing poverty in freshwater resources and fossil energy with burgeoning of renewable energy), first purchase agreements for natural gas from offshore Israeli fields Tamar and Leviathan were signed – amidst protests Project Prosperity, – and negotiations for a water-for-renewable energy project commenced. The latter, called Project Prosperity, became politically untenable and suspended due to public objection during the Gaza war.

There are direct costs and opportunity costs associated with postponement of this collaboration project, which had been designed under a regional integration agenda with involvement of the United Arab Emirates and diplomatic support by the USA. Foregone water security benefits and delayed investments in auxiliary infrastructure, reduce Jordan’s negotiation power and weaken its ability to attract green funding for large-scale infrastructure projects. This notwithstanding, with undiminished needs for regional water and energy cooperation over coming decades and in the presence of the Jordanian national water strategy as well as the kingdom’s ambitious economic and social development 2022-2033 roadmap that aims to more than double the annual GPD growth rate seen in the low growth decade of the 2010s and create one million new jobs  – a 65 percent increase from 2021 job stock of 1.59 million – under a multi-source capital expenditure vision of 41.4 billion Jordanian dinar ($58.4 billion USD).

Measuring divergencies of real GDP growth and sectoral objectives for manufacturing and its sub-sectors such as food, chemicals, pharmaceuticals, and textile, as well as strategic services in trade, tourism, education, healthcare, and finance, plus the energy and water nexus, against the economic roadmap, which represents the Hashemite Kingdom’s latest development agenda, and its timeline for the coming eight years, could be considered as proxy indicator for the economic losses and opportunity costs that Jordan faces in a post-conflict scenario of non-violence from 2026 onward.   

A neighbor to suffering

More immediately, although Jordan’s population has not directly been impacted by the conflict in Gaza in terms of their physical health, there are costs to the healthcare system. Costs directly related to the Gaza conflict entail the operation of a field hospital in the enclave, the provision of emergency medical care to civilians, including burn treatment, as well as trauma therapy, and treatment for long-term illnesses. Jordan’s substantial participation in regional humanitarian response is demonstrated by the close coordination between foreign humanitarian groups and Jordanian medical personnel. Additionally, the field hospital has served as a symbol of Jordan’s humanitarian and political support for the Palestinian people.

Indirect psychosocial effects are impacting Jordan as well. Psychosocial stress levels and mental health among the country’s host communities and refugee populations have significantly increased, according to UNICEF 2023 Integration of Mental Health and Psychosocial Support in Primary Health Care report, with high cases of anxiety, fear, and grief, especially in urban areas like Amman, Zarqa, and Irbid. Furthermore, the UNICEF 2024 annual report on Jordan described that through political mobilization, media coverage, and familial ties to Gaza, where many Jordanian families have relatives, these populations have been exposed to the conflict in an indirect manner. In addition to increased tension during times of increased violence, mental health professionals report an increase in anxiety, despair, grief, and emotional distress, especially among young people and vulnerable populations. These mental burdens and the related costs must be expected to outlast the validity of any economic development plan.  A September 2025 investment case by the Jordanian Ministry of Health and World Health Organization on mental health in Jordan found that in 2023 mental health conditions imposed an economic burden of approximately 251.8 million Jordanian dinars, equivalent to about 0.75 percent of the country’s GDP, including both direct healthcare expenditures and substantial indirect costs such as lost productivity

In the end, what emerges from Jordan’s position in the post–October 7 regional landscape is less a distinct economic imprint than a confirmation of the country’s structural exhaustion. The war in Gaza may have sent measurable macro-shocks across neighboring economies, but in Jordan those signals have been absorbed—muted, refracted, or simply lost. What does stand out is the degree to which Jordan’s vulnerability is now systemic rather than episodic: exposure to climate stress, reliance on remittances, dwindling state capacity, and deepening poverty leave little buffer against any external shock, whether geopolitical or environmental. As the region recalibrates to a new equilibrium of protracted instability, Jordan’s trajectory is a warning that without regional integration, peace and stability, every new crisis adds an additional layer of drawn-out economic fatigue.