The ongoing war in Ukraine and the unprecedented supply disruption has brought the world economy to the brink of a food crisis, warned the International Monetary Fund boss on the first day of the Economic Forum in Davos.
Global prices of wheat, maize and vegetable oils have soared since Russia’s invasion of Ukraine has disrupted the production and shipping of crops from the region – known as the breadbasket of Europe.
“We have had commodity price shocks in many countries. We have seen oil prices decline, but food prices continue to go up and up,” said IMF managing director Kristalina Georgieva. “We can shrink our use of petrol when [economic] growth slows, but we have to eat every day.”
It comes after Bank of England governor Andrew Bailey last week warned of an “apocalyptic” rise in inflation if Ukrainian farming exports continued to be held back from countries that were net food importers.
Bailey said inflation in the UK and other Western countries has hit multi-decade highs in the past few months driven by soaring energy costs and will continue to rise if the ongoing food crisis doesn’t abate.
A group of 50 economists surveyed by the World Economic Forum said the world is heading for its worst food crisis on record, with countries in sub-Saharan Africa, the Middle East and north Africa likely to be the worst affected.
Britain is already facing a cost-of-living crisis and Bailey warned that Britons faced a “very big negative impact” on take-home pay because of rises in the price of imports such as energy.
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