Rising temperatures and extreme weather threaten global agriculture, according to a study by the Potsdam Institute for Climate Impact Research.
Annual food inflation could surge by 3.2% and overall inflation by 1.18% by 2035 due to increased temperatures.
The research analyzed historical data on climate impacts on inflation but didn’t specify the most affected food items.
Study findings reveal that rising temperatures correlate with increased food prices, particularly in hot regions and seasons, potentially escalating food inflation by 1-3% annually by 2035.
This poses challenges to central banks’ inflation targets, such as the ECB’s goal to maintain inflation below 2%. Globally, headline inflation could rise by 0.32-1.18% each year.
The report underscores the threat of economic instability, citing the 2021-2022 cost of living crisis, which drove 71 million people into poverty worldwide. Both high and low-income countries are vulnerable to climate-induced inflation.
The impact is most pronounced in hot
regions and summers, persisting year-round in lower latitudes.
Africa and South America are projected to bear the brunt. Notably, a 1-degree Celsius temperature rise affects prices for up to a year, with prolonged impacts from excess rain but shorter-lived effects from drought.
The study highlights the 2022 European heatwave, estimating a 0.6% increase in food inflation, with future warming likely exacerbating such extremes by up to 50%.
Source: Oman News Agency