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2026-07-15 13:36:12
【Low Rhine Water Levels Again Impact German Manufacturing, Casting Shadow on Economic Recovery and Raising Inflation Risks】 (1) Drought has caused a significant drop in the water level of the Rhine River in Germany, forcing ships to reduce their loads and increasing logistics costs. This poses a supply chain disruption to manufacturing industries that rely on barges for transporting coal, crude oil, and chemicals. (2) Data from the Kiel Institute for the World Economy in Germany shows that the prolonged low water levels in 2018 resulted in a loss of approximately 0.4% in German economic output. Deutsche Bank economists point out that the problem has worsened this year due to the closure of a major freight railway line on the right bank of the Rhine for construction, leading to a severe shortage of alternative rail transport capacity. (3) Furthermore, the low water levels may further push up inflation. ECB Executive Board member Schnabel has listed this factor this month as one of the factors that could keep inflation high, and the ECB is assessing whether to further tighten monetary policy.
