Attacks on shipping links in the Red Sea off the coast of Yemen by the country’s Houthis — launched in retaliation for Israel’s military campaign in Gaza — are posing an ever-greater threat to international trade (and by extension the global economy), with Egypt’s economy in particular set to suffer grievously in the short term.
The Red Sea attacks have caused “the largest diversion of international trade in decades”, according to a research note from MUFG. The attacks have prompted the world’s five largest container lines, representing around 65% of global shipping capacity, to suspend passage through the Suez Canal, with traffic having dropped by about 39% since the start of December, leading to a 45% drop in freight tonnage, according to figures from the United Nations Conference on Trade and Development (Unctad).
