Red Sea crisis grows general transportation expenses By forcing ships to go around the Cape of Good Hope in the south of the African continent, this means more kilometers and more sailing time. But its effect on inflation “For now, it is very small compared to other previous sections,” such as the Ever Given ship that blocked the Suez Canal for six days in March 2021. However, unlike back then, huge ““Uncertainty about how the crisis will develop” It makes it “get worse”.
This is the conclusion of economists. Bank of Spain (BdE) Francesca Viani, from your analysis bottleneck indicator Agency (SBI) calculating in real time Tensions in supply chains, from the rate news in newspapers reporting supply issues for certain areas. The Bank of Spain calculates one main index for each of the major economies (eurozone, China and the US), but there are also specific indices “by events or sectors”.
bottleneck They represent a disharmony between them. supply and demandIt tends to affect economic activity by generally pushing it upwards. inflation. The problem is not new. This already happened after the pandemic or after Russia invaded Ukraine with energy prices. In the first case, problems in supply chains are estimated to increase efficiency. Core inflation in the Eurozone is at 1.2 percent and reduced GDP by 1.9%. And now Crisis in the Red Sea.
Attacks have been continuing since mid-December Yemen Houthi rebels to cargo ships heading towards Suez CanalThe region passes through 30% of global container traffic, making transit through the region risky. That’s why many shipping companies have made changes their routes, So much so that traffic on the Red Sea decreased by 40%. Specially according to the measuring indicator intensity between Supplying bottlenecks in the Red Sea and Suez Canal, mid january Exceeded the level reached in March 2021When the Ever Given ship ran aground.
But this congestion is unlikely to have much of an impact on major economies. special case eurozoneThere has been an increase in recent months, but still well below previous crises according to the measuring index Bottlenecks in all euro countries. “The current weakness in global demand and the lack of congestion in the logistics sector and global supply chains before the current event could have contributed to this.” surround Francesca Viani talks about “bottlenecks” in the text.
Based on this analysis, Viani said, “current estimates suggest that: coup Red Sea tension about inflationso far so far reduced”. But unlike the Ever Given episode, he adds: Uncertainty about how the current crisis will develop is quite high.