New global food crisis emerging
The war in Ukraine has triggered an alarming global surge in government controls on the export of food. It’s critical for policymakers to halt the trend, which is making a global food crisis more likely.
In the space of a few weeks, the number of countries slapping on food-export restrictions jumped by 25%, bringing the total number of countries to 35. By the end of March, 53 new policy interventions affecting food trade had been imposed—of which 31 restricted exports, and nine involved curbs on wheat exports, according to the latest data. History shows that such restrictions are counterproductive in the most tragic ways. A decade ago, most notably, they exacerbated the global food crisis, driving up wheat prices by a whopping 30%.
Food crises are bad for everyone, but they are devastating for the poorest and most vulnerable people. This is because of two reasons.
– World Bank
‘Soaring prices put poor countries at default risk’
The IMF has warned that sharply higher global food and energy prices due to the war in Ukraine are hitting poor countries hard.
Sharply higher global food and energy prices due to the war in Ukraine are hitting developing countries hard, and better mechanisms for dealing with sovereign debt stress will be needed to stave off defaults, the International Monetary Fund (IMF) said on Monday.
“The war in Ukraine is adding risks to unprecedented levels of public borrowing while the pandemic is still straining many government budgets,” Vitor Gaspar, director of the IMF’s fiscal affairs department, and Ceyla Pazarbasioglu, the organisation’s strategy chief, wrote in a new blog.
About 60 percent of low-income countries were already in, or at risk of, debt distress, the authors said.
Rising interest rates in leading economies could lead to widening spreads for countries with weaker fundamentals, making it more costly for them to borrow. – Aljazeera
List of risks clouds economic outlook
The war in Ukraine, Russia sanctions, China’s “zero Covid” policies, spiking inflation, and interest hikes by the US Federal Reserve are among the risks for the global economy in 2022.
Just as the global economy is bouncing back from the Coid-19 pandemic, a growing list of risks is clouding the economic outlook – although most economists still believe a recession this year is relatively unlikely.
The war in Ukraine, Russia sanctions, China’s “zero Covid” policies, spiking inflation, and interest hikes by the United States Federal Reserve are all set to crimp growth in 2022.
The question is whether deteriorating conditions and ill-judged policy choices could tip the global economy from a slowdown into a contraction.
“Recessions are incredibly hard to predict, and even good forecasters, e.g. the Fed, only know we’re experiencing a recession once we’re in one, not in advance,” an economics professor at the George Washington University in Washington, DC, Tara Sinclair said.
– Aljazeera
– Sunday Observer Sri Lanka
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