Euro area: Supply chain risks and core goods outlook – Societe Generale
Societe Generale economists Sam Cartwright and Michel Martinez analyze how renewed supply chain disruptions, including conflict in the Middle East, may affect Euro Area prices.
In a recent analysis, Societe Generale economists Sam Cartwright and Michel Martinez examine the potential impact of renewed supply chain disruptions, particularly conflict in the Middle East, on inflation within the Euro Area. By adapting the New York Fed's Global Supply Chain Pressure Index for Europe and Asia, they note that while supply chain pressures have eased this summer, they remain elevated and may still influence inflation in the upcoming months.
The economists project that Euro Area non-energy industrial goods inflation will peak at 1.8% in the second half of 2027 before normalizing. The article underscores how the ongoing conflict in the Middle East has rekindled concerns about the strength of European supply chains, following the disruptions caused by both the Covid pandemic in 2020-21 and the war in Ukraine since 2022.
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