Reports
Discussion Papers
No.919 Economic Impacts of the blockage of the Suez Canal: an Analysis by IDE-GSM
by Toshitaka GOKAN, Satoru KUMAGAI, Kazunobu HAYAKAWA, Kenmei TSUBOTA, Ikumo ISONO, Souknilanh KEOLA, and Hiroya KUBO
February 2024
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
JEL classification: C68, F13
PDF available at http://hdl.handle.net/2344/0002000862
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