Global trade has faced setbacks due to disruptions in key shipping routes. Attacks in the Red Sea area reduced traffic through the Suez Canal, diverting ships around the Cape of Good Hope and increasing delivery times by over 10 days. Additionally, a severe drought at the Panama Canal has led to restrictions, slowing maritime trade through this critical chokepoint. Data from the IMF’s PortWatch platform reveals a 50 percent drop in trade volume through the Suez Canal, a 74 % increase in trade around the Cape of Good Hope, and a 32 % decline in trade through the Panama Canal compared to the previous year.
Port calls to ports in sub-Saharan Africa, the European Union, and the Middle East and Central Asia have also declined, likely due to longer shipping times. These disruptions may temporarily affect supply chains and contribute to inflationary pressures due to higher shipping costs.
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