Economic Impacts of the blockage of the Suez Canal: an Analysis by IDE-GSM
Toshitaka Gokan,
Satoru Kumagai,
Kazunobu Hayakawa,
Kenmei Tsubota,
Ikumo Isono,
Souknilanh Keola and
Hiroya Kubo
No 919, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)
Abstract:
In this study, we attempted to identify the magnitude and geographical distribution of the negative and positive economic impacts of the blockage of the Suez Canal using a CGE model based on spatial economics with realistic geographical/logistic settings at the sub-national level. The estimated annual net negative impacts of the blockage totaled 79.6 billion USD for the world or 0.1% of the world’s GDP. However, positive impacts (211.9 billion USD) offset the significant negative impacts (291.5 billion USD). Among the countries, China is negatively affected most by the blockage of the Suez Canal in terms of value (-73.0 billion USD), followed by India (-26.2 billion USD) and Israel (-20.4 billion USD). EU also has a sizeable negative impact (-72.9 billion USD) collectively. However, some countries benefited from the blockage, such as the US (59.9 billion USD), Japan (32.0 billion USD), Brazil (20.0 billion USD) and Australia (18.2 billion USD). We effectively showed that the blockage of just one point in the sea route has a substantial adverse economic impact worldwide.
Keywords: Suez; Canal|IDE-GSM (search for similar items in EconPapers)
JEL-codes: C68 F13 (search for similar items in EconPapers)
Date: 2024-02
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Published in IDE Discussion Paper = IDE Discussion Paper, No.919. 2024-02
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