Tensions in the Red Sea could lead to a significant acceleration in inflation in Europe.
How writes BB.LV, analysts from the Organization for Economic Co-operation and Development (OECD) warn: imported inflation* in Europe may accelerate.
The main reason is the shelling of merchant ships by Yemeni Houthi rebels from the Ansar Allah paramilitary group, CNBC reports, citing analysts’ forecasts. Tariffs for maritime transport have increased by 100% amid continued hostilities in the Red Sea. This could lead to an acceleration of imported inflation in the 38 OECD member countries by 5 percentage points in 2024 and another 0.4 points in 2025, provided that geopolitical tensions in the Middle East region persist.
The increase in logistics costs is largely due to the need for shipping companies to find alternative routes to the Suez Canal. One of these options was to bypass the African continent through the Cape of Good Hope. As a result, the total travel time increased by an average of 30-50%. This will lead to an increase in final prices for goods delivered by sea, experts say.
*inflation that occurs due to increased prices for imported goods and services.
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