The International Monetary Fund’s (IMF) African director warned on the 14th (local time) that global inflation is causing “horrifying” food instability.
According to Reuters, Abebe Selash, director of the IMF’s Africa bureau, said, “Most African central banks are walking on a tightrope to curb inflation beyond their control,” adding, “Inflation causes terrible food insecurity.”
In its twice-annual regional economic outlook report, the IMF announced that 123 million people, or 12% of sub-Saharan Africa, are facing severe food insecurity.
The report, published before the COVID-19 pandemic, is a significant increase compared to the announcement that 82 million people are in food insecurity. COVID-19, the aftermath of the Ukrainian war, civil war and worsening drought in some parts of Africa seem to have affected it.
“War and other situations were added to the chaos caused by the pandemic,” Selash said. “I stayed in Chad, Central Africa, in May, and the situation there was really terrible in terms of food security.”
The annual food price inflation rate in sub-Saharan Africa remains more than 10% compared to the previous year. Initially, the region’s inflation forecast for this year was 6.7%, but the IMF predicted an increase of 2 percentage points (p) to 8.7%.
In addition, the GDP growth forecast was lowered by 0.2%p to 3.6%.
According to FedWatch, interest rates are likely to rise to 4 percent on the 2nd of next month to 96.3 percent, and interest rates are expected to reach 4.75 percent at the last FOMC of this year on December 14. They say that it is likely to take the giant step in both of the remaining two call meetings this year. A more serious problem is that interest rate hikes are also expected at the FOMC on February 1, which will be held for the first time next year, with a 57.1% chance of maintaining the 5% range.
