The World Bank assures that inflation remains high in the world

In his latest update on food safetythe World Bank highlights that food price inflation remains high in almost all low- and middle-income countries and has also risen sharply in a proportion of high-income countries.

Data between March and June 2022 indicate high inflation in almost all low- and middle-income countries, indicates the World Bank in its report “Inflation remains high around the world.”

The publication of last July 29 indicates that the unprecedented rise in food prices has caused a global crisis that will push millions more into extreme povertyincreasing hunger and malnutrition, and threatening to undo hard-won development gains.

The war in Ukraine, supply chain disruptions and the continuing economic fallout from the Covid-19 pandemic are reversing years of development gains and pushing food prices to record highs.

General view

As of July 29, 2022, the agricultural price index was 19% higher than the January 2021 level. Corn and wheat prices were 16% and 22% higher, respectively, than January 2021, and rice prices were 14% lower.

Between March and June 2022, there was high inflation in almost all low- and middle-income countries; 93.8% of low-income countries, 89.1% of lower-middle-income countries, and 89% of upper-middle-income countries have experienced levels of inflation above 5%, with many experiencing inflation two digits.

The share of high-income countries with high inflation has also risen sharply, with about 78.6% experiencing high food price inflation.

According to the April 2022 edition of the reportCommodity Market OutlookAccording to the World Bank, the war in Ukraine has altered global patterns of trade, production and consumption of basic products in such a way that prices will remain at historically high levels until the end of 2024, exacerbating food insecurity and inflation.

Products

Food prices were already high before, and the war pushes the prices of most foods even higher. The commodities that have been most affected are wheat, corn, edible oils and fertilizers.

Global commodity markets face upside risks through the following channels: reduced grain supplies, higher energy prices, higher fertilizer prices and trade disruption due to closure of markets. main ports.

Challenge

In the coming months, a major challenge will be access to fertilizers, which could impact food production for many crops in different regions.

Russia and Belarus are the main exporters of fertilizers, with 38% of potassium fertilizers, 17% of compound fertilizers and 15% of nitrogenous fertilizers.

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On April 13, 2022, the highest authorities of the World Bank Group, the International Monetary Fund, the United Nations World Food Program and the World Trade Organization released ajoint declarationin which they called on the international community to take urgent action to address food insecurity, keep trade open and support vulnerable countries, including providing financing to meet the most urgent needs.

After the start of the war in Ukraine, the trade-related policies imposed by the countries have increased. The world food crisis has been aggravated in part by the increasing number of restrictions on food trade established by countries with the aim of increasing domestic supply and reducing prices. As of July 15, 18 countries have implemented 27 food export bans, and 7 have implemented 11 export restriction measures.

Worldwide

Hunger levels remain alarmingly high. According to the reportThe state of food insecurity and nutrition in the world 2022the number of people affected by hunger increased in 2021 to 828 million, an increase of around 46 million since 2020 and 150 million since 2019, before the outbreak of the Covid-19 pandemic.

Also,the World Food Program and the Food and Agriculture Organization of the United Nations (FAO) warnedthat acute food insecurity could worsen in 20 countries or areas between June and September 2022.

According torapid telephone surveys conducted by the World BankIn 83 countries, significant numbers of people went without food or reduced their consumption during the first two years of the Covid-19 pandemic. Decreased calorie intake and poor nutrition threaten gains in health and poverty reduction, and could have lasting effects on the cognitive development of young children.

The support of the World Bank

On May 18, the World Bankannounced measures it planstaken as part of a comprehensive and global response to the ongoing food security crisis, for which up to US$30 billion will be allocated for existing and new projects in areas such as agriculture, nutrition, social protection, water and irrigation. Efforts to encourage food and fertilizer production, improve food systems, facilitate increased trade, and support vulnerable households and producers will be funded.

On May 19, the World Bank Group and the Presidency of the Group of Seven (G7) jointly convenedThe Global Alliance for Food Securitywhich aims to catalyze an immediate and concerted response to the ongoing global hunger crisis.

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