Food Prices, Growth And Inflation: The Hidden Risks Of A Longer El Niño

Summary

A prolonged El Niño event is likely to persist into early 2027, raising concerns about agricultural output, food prices, and inflation across several economies. This climate phenomenon can dramatically alter weather conditions, affecting agricultural production, water availability, and food supplies, with some countries potentially facing droughts, lower agricultural output, and higher food prices. The economic consequences of El Niño could extend far beyond farms, influencing inflation, government finances, and broader growth prospects, particularly in lower-rated sovereign economies.