As the pandemic subsided, inflation picked up at the end of 2022. To curb inflation, central banks around the world resorted to the old proven key tool, raising interest rates.
Inflation was further fueled by the Russian invasion of Ukraine on February 24, 2023, increasing food and energy costs for Europe. Europe's natural gas imports at the time consisted of approximately 40% of Russian natural gas.
Israel's response to Hamas' attack on Israel on October 7, 2023 in which Hamas killed 1,400, injured 4,800 and kidnapped 240 Israelis has caused great concern in that part of the world. Among other things, the Iran-backed Houthi movement in Yemen is accused of having carried out a series of attacks against commercial shipping in the Red Sea since November 2023.
A consequence of this is that approximately 18 shipping companies have chosen to divert their ships around South Africa to reduce attacks on their ships. This entails an additional ten days of travel time and negative consequences for trade and increased transport costs.
Taking advantage of the ongoing unrest in the area, Iran launched a missile and drone strike against Pakistani territory in Baluchistan near the border between the countries on January 16, 2024. According to Iran, the target was an Iranian Sunni extremist resistance group. Pakistan responds a day later also militarily, with attacks in Iran, and states that it was done in search of Pakistani resistance fighters.
Boring sounds like a good option now.
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