According to the Essen-based economic research institute RWI, the conflict with the Yemeni Houthi rebels is unlikely to lead to higher inflation in Germany.
RWI economic expert Torsten Schmidt told the German Press Agency on Friday that he does not expect the restrictions in the Suez Canal to have a noticeable impact on consumer prices. However, the uncertainty contributed to the German economy finding it difficult to overcome the economic weakness at the beginning of this year.
Many goods are transported from Asia to Europe through the Suez Canal. If this route were to be canceled for a long period of time, it would not be good news for world trade and production in Europe, said Schmidt. “The production stop at shows very clearly how fragile the international supply chains still are.”
The Yemeni Houthi rebels repeatedly attack merchant ships in the Red Sea. In response, the USA and Great Britain said they bombed the group’s positions in Yemen. Many shipping companies avoid the region and take thousands of kilometers detour via the southern tip and west coast of Africa. (dpa)