The World Economy in Hampered Supply Chains

In the course of 2021, global industrial activity and trade have increasingly been impaired by supply chain disruptions amid robust demand and strong incoming orders. Global sea logistics was in turmoil with local congestion, lack of containers and high freight rates. Costs of transport and of raw materials surged, delivery times increased markedly, and critical inputs like computer chips were temporarily not available to many businesses. As a result of supply bottlenecks, the initially strong economic recovery from the Covid-shock was slowed down. The 104th KKG discusses the mixture of temporary and structural factors behind recent supply chain disruptions, their impact on prices and volumes, their geographical and sectoral patterns, and whether and when they are expected to recede. In addition, we discuss repercussions of the war in Ukraine, including sanctions against Russia.