(Bloomberg) –Shipping costs are rising as hundreds of container ships that typically transit the key maritime artery of the Red Sea and Suez Canal are rerouting after a multitude of attacks by Iran-backed Houthi militants.
Combined with disruptions at a drought-stricken Panama Canal in the Western Hemisphere, the rise in merchant shipping rates poses headwinds for central bankers in their inflation fight.
Meantime, the economy in Vietnam exceeded expectations this year and is poised for better results in 2024. For economies in many African nations next year, credible elections and improved governance are key.
Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy:
World
Half of the container-ship fleet that regularly transits the Red Sea and Suez Canal is avoiding the route now because of the threat of attacks, according to new industry data. The tally compiled by Flexport Inc. shows 299 vessels with a combined capacity to carry 4.3 million containers have either changed course or plan to. That’s about double the number from a week ago and equates to about 18% of global capacity. Diverted voyages are more costly and may lead to higher prices for consumers on everything from sneakers to food to oil if the longer journeys persist.
The theme for the African continent in 2024 appears to be all about who’s in charge. From South Africa to Algeria, a third of the continent’s nations will choose new governments, including coup-hit Mali, Chad and Burkina Faso — if their junta leaders keep their word. Credible elections and improved governance will form the bedrock for some of the world’s poorest — and youngest — nations to reduce conflict, spur economic growth and boost employment. The prevailing environment makes that difficult.
Asia
Vietnam’s economy fared better than expected in 2023, indicating it will keep improving as consumer demand returns, exports recover and investments surge. GDP rose 5.05% from a year earlier after increasing an initial 8.02% in the previous year. The economy is expected to return to 6% growth next year, and vie for the best-in-Asia growth tag by 2025, a Bloomberg survey shows.
South Korea’s semiconductor industry recorded the largest gains in years in both production and shipments, underscoring a revival of technology momentum that bodes well for the nation’s economic outlook next year and for the global tech sector.
Investors who bought into the idea two years ago that China’s consumer and green energy stocks stand to win big from President Xi Jinping’s renewed economic agenda would have seen their holdings pummeled in 2023.Europe
Spanish inflation remained steady at the end of 2023, tempering a likely euro-zone pickup that may embolden policymakers to keep pushing against bets on imminent interest-rate cuts. Even though inflation may remain elevated in the near term, central banks in Spain, France and Italy all project it will slow to 2% or even lower in 2025. Germany’s Bundesbank isn’t so optimistic, seeing Europe’s largest economy stuck above the target into 2026, kept higher by wages.
Britain’s economy probably will avoid a recession in 2024 and strengthen in the second half of the year as consumers benefit from falling inflation and the easing of a lengthy cost-of-living crisis. In aggregate, the 52 economists surveyed by Bloomberg believe the Treasury and the Bank of England will engineer a soft landing for the economy next year, with growth of 0.3%.
Russia’s oil-product exports dropped on a weekly basis, led by a slump in shipments of diesel, naphtha and fuel oil. However, the four-week average climbed to the highest in more than seven months amid a ramp-up in oil processing at Russian refineries.
US
Initial applications for US unemployment benefits increased in the week leading up to Christmas, while remaining at a level that is consistent with a resilient labour market.
Employers expect to hire less in 2024, according to several regional Federal Reserve bank surveys, a trend that’s set to limit wage gains and cool inflation pressures. At the same time, the results don’t indicate an outright contraction in payrolls.
Emerging Markets
Kenyan consumer prices rose at the slowest pace in almost two years in December, while economic growth accelerated more than expected in the third quarter, delivering some respite for the battered East African economy.
Brazil’s annual inflation slowed less than expected in mid-December, highlighting the difficulties facing central bankers as they cut interest rates while attempting to haul prices to the tolerance range by year’s end.
