Unlike its previous forecasts last November, the Organization for Economic Cooperation and Development (OECD) yesterday added two key words to its estimates: Red Sea.
The crisis that is being experienced in the Suez Canal, with attacks by the Houthi rebels on the ships that transit through the waters of this commercial artery, can be detrimental to the world economy.
Shipping costs have increased markedly and delivery times have lengthened, especially for trade from Asia to Europe. This situation has already begun to disrupt production schedules in Europe, particularly for automakers.
About 15% of global maritime trade volume passed through the Red Sea in 2022. Traffic this year has already fallen by about 40%, according to the IMF. Using a longer route around the Cape of Good Hope increases journey times by 30% to 50%, depending on the route in question, and increases global shipping capacity needs.
“OECD research suggests that the recent 100% increase in freight rates, if it persists, could increase annual OECD import price inflation by around 5 percentage points, adding 0.4 percentage points to inflation.” of consumer prices after approximately one year,” they maintain.
Forecasts that coincide quite closely with the research of Oxford Economics analysts, who predict a recharge of three tenths and which underline how in Europe part of the effect of the increase in inflation will be offset by the decrease in the price of natural gas. “We assume that companies will pass most of the increase in costs to consumer prices, but weak demand and high inventories, while profit margins are still high, could limit this impact,” these economists say.
In the macroeconomic field, the OECD raised its GDP growth forecasts for Spain this year by one tenth, to 1.5%. It is the only one among the large economies of the euro zone that has seen its data improve compared to November.
Furthermore, it is a rate that more than doubles that of the eurozone (and five times that of Germany), since, in the words of Clare Lombardelli, chief economist of the OECD, Spain benefits from an inflation somewhat lower than that of its European counterparts. .
But the rate is half a point lower than what is contemplated in the Government's plans sent to Brussels (2%) and is half of what the world economy should register in 2024 (2.9%).
On a global scale, the buoyant leadership of India is striking, which seems increasingly called upon to replace (at least in this ranking) China as the locomotive of world growth, with 6.2% this year, which makes pale Beijing, which with 4.7% is headed for a new economic cycle, trapped between demographic decline, a real estate bubble and a fall in foreign investment.
The eurozone, with a modest 0.6%, remains stagnant. The motives? The Old Continent discounts geopolitical uncertainty with the war in Ukraine, tries to recover from its energy dependence on Russia and finds itself trapped in a spiral of great debt, which deepened as a result of the pandemic and which continues to consume resources due to the aging of the population and the costs of the green transition.
The OECD concludes with two warnings. One is that global trade is on a plateau with protectionism on the rise (11% of imports suffered restrictions in 2023). And two, central banks will lower rates this year, but they will have to be cautious and wait until prices are under control. The 2% goal will be reached in 2025. With the permission of the Houthis.
