Megaship Ever Given blocking Suez Canal won’t significantly disrupt Egypt’s balance of payment: Moody’s

Egypt’s balance of payments will not to see a remarkable t disruption as a mega ship called, Ever Given, has been blocking the Suez Canal for almost a week, Moody’s announced on Monday.

Moody’s rates Egypt at B2 stable in credit rating terms.

Suez Canal receipts amounted to almost 2 percent of the country’s GDP on average prior to the COVID-19 crisis, providing a significant contribution to Egypt’s total current account receipts, according to Moody’s.

On the other hand, Moody’s said that despite declining to 1.3 percent of GDP during the acute phase of the pandemic, Suez Canal receipts have proven more resilient than other cross-border services such as travel receipts.

“A temporary disruption will not materially change our expectation of a return to pre-crisis canal receipts, as global trade recovers. Despite the canal’s importance, especially for hydrocarbon products transported by sea, we expect that other Suez Canal-reliant exporters, including oil-exporting countries in the Middle East, are unlikely to be affected in the absence of an extended disruption,” according to Moody’s expectations.

On the global trade level, the incident is projected to temporarily affect the global container throughput volume by 10 to 15 percent, according to Moody’s estimations.

It added that the repercussions of delays for global supply chains would, under normal circumstances, are “not a big issue.”

However, very high consumer and industrial demand, a global shortage of container capacity, and low service reliability from global container shipping companies have already caused long delays and made supply chains highly vulnerable to even the smallest of external shocks, according to Moody’s.

“Accordingly, the timing of such a blockage could not have been worse”, said Moody’s.

As a result of the ‘Ever Given’ container ship incident, ships that will decide to use the longer route around the Cape of Good Hope instead will add around 10 days to their journey compared to the main route that includes the Suez Canal, Moody’s estimated.

Moody’s also expected that the ongoing disruption of maritime traffic will affect individual sectors severely because of the uncertainty over how long the canal