- Yemeni Houthi attacks disrupting shipping routes, especially the Red Sea, may fuel global inflation, warns EBRD’s Chief Economist, Beata Javorcik.
- The impact on energy prices and supply chains raises concerns, jeopardizing progress in curbing inflation.
- Central banks remain cautious, highlighting the fragile nature of the global economic recovery amidst rising geopolitical risks.
In an exclusive interview at the World Economic Forum, EBRD’s Chief Economist, Beata Javorcik, highlighted the potential impact of Yemeni Houthi attacks on global inflation. With key shipping routes disrupted, including the Red Sea and Suez Canal, concerns arise about energy price hikes, impacting the supply chain and escalating consumer prices. This poses a threat to the progress made in curbing inflation, prompting central banks, such as the European Central Bank, to remain cautious.
The Evolving Global Economic Landscape
Despite recent reductions in headline inflation, the EBRD emphasizes the fragile nature of economic recovery. Rising geopolitical risks, soaring interest rates, and high government borrowing costs remain significant challenges. In the coming year, the EBRD aims to prioritize advancing the green transition in Europe, with over 50% of recent investments directed towards the green economy.*
Navigating Economic Challenges in 2024
As we face disruptions in major shipping routes, it becomes imperative to address the potential ripple effects on global inflation. The cautionary stance of central banks indicates the need for a resilient economic strategy. The EBRD’s commitment to advancing the green transition underscores the importance of sustainable investments in navigating the complex economic landscape of 2024.
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Source: Euro News
