MNI BRIEF: Limited Red Sea Inflation Impact For Now - BOS

The impact on inflation from taffic disruptions in the Red Sea “would, for now, be very small,” the Bank of Spain wrote in its latest blog published Monday, noting that the situation must be closely monitored due to the high levels of uncertainty.

The national central bank bases its conclusions on estimates from its bottlenecks index, that shows rising problems in the euro area since mid-December, but remaining well below levels seen during the pandemic.

“The current weakness in global demand and the absence of congestion in the logistics industry and global supply chains before the current episode would have contributed to this containment of bottlenecks,” the BoS wrote on the blog.