![Suez disruption: A new inflation risk on the horizon](https://aveholidays.com/wp-content/uploads/2023/12/suez-canal-august-6-2023-reuters-001.jpg.jpg)
FRANKFURT, Germany – A lengthy disruption of shipping via the Suez Canal could push up prices and weigh on economic growth, particularly in Europe, which is already struggling with a perilous combination of high inflation and economic contraction. The following looks at the potential macroeconomic costs associated with the disruption after attacks by Yemen’s Iran-aligned Houthi militants on ships in the Red Sea forced firms to halt or reroute traffic. About 15% of world shipping traffic including roughly 30% of global container trade passes through the Suez Canal. Routing ships around Africa would increase a round-trip journey by about two and a half weeks, cutting shipping capacity and pushing up costs. “The longer duration of the transit via the Cape of…