With: 

Jeffrey Schultz, Chief Middle East and Africa Economist | BNP Paribas South Africa Branch

Niccolo Carrara, Economist, Emerging Markets | BNP Paribas London Branch

This podcast was recorded 2 May 2023

• EM food prices look set to remain well above levels consistent with inflation targets even as base effects suppress year-on-year rates of price growth. 


• We expect inelastic food demand, supported by post-pandemic recoveries, to combine with supply risks, including export restrictions from large producers and constraints on energy-dependent agricultural inputs. 


• As food prices matter a great deal for EM inflation, central banks face a tough time taming inflation expectations. 


• Central banks’ task will be even harder if the risk of social turmoil resulting from elevated food prices tempts governments to step up fiscal subsidies. 


• Our food vulnerability indicator highlights particular potential for pressure in pockets of CEEMEA and EM Asia. 


• Fiscal responses to high food prices would also risk driving up risk premia as markets reassess EM fiscal sustainability amid higher debt-servicing costs.

For more information, please refer to https://markets360.bnpparibas.com  

For country-specific disclaimers and legal notices, please refer to https://globalmarkets.bnpparibas.com/gm/home/Markets_360_Country_Specific_Notic 

Hosted by Ausha. See ausha.co/privacy-policy for more information.