Economists warn tensions in the Red Sea will have little impact on prices in Portugal

According to analysts consulted by Lusa, higher freight rates due to tensions in the Red Sea should lead to a temporary increase in the prices of raw materials and therefore the products that reach Portuguese consumers.

“For Portugal, the impact exists on companies or sectors that import from China and integrate Chinese components into their production chain. It seems to me that the effect will be temporary rather than permanent, but higher freight rates are likely to be passed on less to clients and consumers,” explains IMF President for Financial Markets Information Filipe Garcia.

Houthi rebel attacks on civilian shipping in the Red Sea have driven up shipping prices and companies are looking for alternative routes to avoid the Suez Canal, where trade has fallen 42% in the past two months, according to the United Nations. United (UN).

One alternative is to go around the Cape of Good Hope in South Africa. This route is about 40% longer, explains Banco Carregosa senior economist Paulo Rosa.

The economist explains that this could have an impact on the Portuguese economy “directly by increasing the cost of raw materials imported by Portugal, and indirectly by damaging the eurozone economy.”

Optimize executive president Pedro Lino notes that the impact could also come from “greater uncertainty about the European economy.”

“In trade, we should expect higher logistics costs,” he says.

According to the analyst, this will have an impact on imports such as oil and products from Asia, as well as on Portuguese exports, which could suffer from delays, putting further pressure on companies’ profitability.

The Houthis say their drone and missile attacks, which began on November 19 against commercial shipping, are aimed at stopping Israel’s war against Hamas in the Gaza Strip and claim attacks on targets linked to Israel.