The Threat of Inflation Returns with Surging Shipping Costs

The Threat of Inflation Returns with Surging Shipping Costs

The Organisation for Economic Co-operation and Development (OECD) has highlighted the potential for recent spikes in freight rates to contribute to import price inflation across its 38 member countries by almost 5%, should these elevated levels persist. However, the OECD emphasizes that this scenario is not the organization’s primary assumption.

The European market is considered particularly vulnerable, with the ongoing crisis in the Middle East causing substantial delays. OECD Chief Economist Clare Lombardelli stated, “It’s something we’re watching closely…but at the moment, we don’t anticipate that to be the case.”

While the OECD recently raised its 2024 economic growth forecast for the United States to 2.1%, it concurrently revised down the forecast for the eurozone to 0.6%.