War Has Already Hurt the Economies of Israel's Nearest Neighbors

"No one wants to invest, but Egypt is too big to fail," Mr. Landis said, explaining that the United States and I.M.F. are unlikely to let the country default on its 165 billion of foreign loans given its strategic and political importance. The drop in shipping traffic crossing into the Red Sea from the Suez Canal is the latest blow. Between January and August, Egypt brought in an average of 862 million per month in revenue from the canal, which carries 11 percent of global maritime trade. James Swanston, an emerging-markets economist at Capital Economics, said that according to the head of the Suez Canal Authority, traffic is down 30 percent this month from December and revenues are 40 percent weaker compared to 2023 levels. "That's the biggest spillover effect," he said.