"OECD Warns of Inflation Risk Amid Red Sea Tensions"

The OECD warns that ongoing tensions in the Red Sea could lead to significantly higher inflation due to a 100% rise in seaborne freight rates, potentially increasing import price inflation across its 38 member countries by nearly 5 percentage points. Major shipping firms began diverting vessels away from Egypt's Suez Canal in late 2023, leading to longer journey times and capacity reduction in the global market. While the shipping industry had excess capacity last year, the OECD is closely monitoring the situation and notes positive data showing inflation coming down among its members. The organization also adjusted its economic growth forecast for the U.S., euro zone, and U.K.