Soaring food prices to last until end of 2023 – IMF
International Monetary Fund (IMF) has predicted that the soaring food prices reported across the world, including Nigeria, which the organisation attributed to the ongoing war in Ukraine, could last until the year 2023.
The world lender disclosed this in its report, ‘World Economic Outlook: War Sets Back the Global Recovery April 2022,’ released on its official website.
According to the organization, inflation is expected to remain high, and far longer than it had previously forecast, owing to the impact of the war in Ukraine and the broadening of price pressures.
The report read: “The conflict is likely to have a protracted impact on commodity prices, affecting oil and gas prices more severely in 2022 and food prices well into 2023, because of the lagged impact from the harvest in 2022.
“For 2022, inflation is projected at 5.7 percent in advanced economies and 8.7 percent in emerging market and developing economies—1.8 and 2.8 percentage points higher than in the January World Economic Outlook.
“Inflation in 2023 is projected at 2.5 percent for the advanced economy group and 6.5 percent for emerging market and developing economies (0.4 and 1.8 percentage points higher than in the January forecast).
“However, as with the growth outlook, considerable uncertainty surrounds these inflation projections.”
Also, the IMF explained that energy and food prices contributed significantly to the headline inflation across the regions in the year 2021, noting that the sharp hike in oil and gas prices led to an increase in the cost of energy.
These increases were the main driver of headline inflation in Europe and to a lesser extent the United States.
In most emerging markets and developing economies, rising food prices also played a significant role, as poor weather hit harvests and rising oil and gas prices drove up the cost of fertilizer.
“Higher prices for international food commodities impact countries differently depending on the food share of households’ consumption baskets and the types of foods consumed.
“Households in low-income countries are particularly exposed to changes in the price of staple cereals, with diets often concentrated on just one type of grain.
“Low-income countries where wheat, corn, and sorghum are a large part of the diet (especially in sub-Saharan Africa) have seen inflation almost wholly driven by rising food prices,” the report added.
