IMF Expands Aids to Address Rising Global Food Prices

On September 12th, according to the sources familiar with the matter, the International Monetary Fund (IMF) is trying to provide emergency financial assistance to countries where food prices have been soaring due to the war and will discuss related measures at the executive board session at the same day.

The plan is designed to allow the IMF to bypass the various conditions of the regular financing program and aid Ukraine and other countries hit hard by the war. The scale and scope of the plan are yet to be determined, but it is estimated that the specific results will be officially announced before the IMF’s annual meeting in October.

After the outbreak of the Ukraine war, the global food price has surged due to the disruption of supply routes, sanctions imposed on Russia, and other trade restrictions. In July, the IMF predicted that inflation in advanced countries will reach 6.6% this year, and 9.5% in emerging markets and developing economies. It is a “clear risk” to current and future macroeconomic stability.

Many African and other poor countries also have asked for increased funding because of food shortages, but it is unclear how many countries will be able to apply for additional financial assistance.

The World Bank reported in August that the war has changed the global trades, production and consumption patterns of bulk commodities, and inflation across the world is expected to continue until the end of 2024.

IMF data shows that food price in many developing countries is the single largest group in inflation indexes, accounting for about half in countries such as India and Pakistan, and on average for about 40% in low-income countries.