Red Sea Attacks Drive Shipping Costs Up By 150%, Fitch Warns Of Inflation Impact

By
Mfame Editor
-
146

  • Fitch Ratings warns of inflation impact as attacks in the Red Sea drive shipping costs up by over 150%.
  • The disruptions pose challenges for reducing inflation, with potential repercussions on import prices and consumer goods supply.

Fitch Ratings has highlighted the significant impact of attacks in the Red Sea on shipping costs, projecting a surge of over 150%. These disruptions, primarily instigated by Houthi rebels targeting cargo ships, have intensified since late 2023. The attacks, attributed to the rebels’ protests against Israel’s actions in Gaza, have raised concerns about inflation management.

Challenges in Reducing Inflation Amid Rising Shipping Costs

Fitch’s forecast indicates that the steep increase in shipping costs could potentially contribute an additional 0.5 percentage points to core inflation. The implications extend beyond immediate cost escalations, with longer shipping times anticipated to hamper supplies of intermediate inputs and consumer goods. This scenario complicates efforts to curb inflation, particularly considering the protracted timeframe for these effects to manifest in inflation metrics.

Economic Projections and Impact on Central Banks

Looking ahead, Fitch projects a notable increase in US import price inflation by the end of 2024, potentially reaching a 3.5 percentage point surge. Additionally, a rise of about 1.5 percentage points in US core goods inflation is anticipated. Economists warn that navigating the final stages of inflation reduction, particularly to meet central bank targets, will prove challenging amidst mounting shipping costs. The economic landscape is further complicated by the reluctance of central banks, such as the Federal Reserve, to adjust monetary policies in response to these disruptions.

Did you subscribe to our daily Newsletter?

It’s Free! Click here to Subscribe

Source: Business Insider

4 COMMENTS

  1. Wonderful goods from you, man. I have understand your stuff
    previous to and you’re just too fantastic. I really like what you’ve acquired here, certainly like what you’re saying and the way in which you say it.
    You make it entertaining and you still care for
    to keep it wise. I can’t wait to read far more from you.
    This is really a tremendous site. I saw similar here: Sklep online

  2. If you are going for best contents like me, simply pay a quick
    visit this web page everyday as it offers quality contents, thanks I saw similar here: Dobry
    sklep

  3. Pretty part of content. I simply stumbled upon your blog and in accession capital to claim that I get in fact enjoyed account your weblog
    posts. Anyway I will be subscribing in your feeds and even I fulfillment you get entry
    to persistently rapidly. I saw similar here: ecommerce and also here: ecommerce

  4. Wow, incredible blog structure! How lengthy have you ever been running a blog for?
    you make running a blog glance easy. The overall glance
    of your website is excellent, let alone the content!
    You can see similar: sklep online and here sklep

Comments are closed.