IMF readies support over El Nino food risks

The International Monetary Fund is preparing to support countries exposed to El Nino as food security risks grow, IMF chief Kristalina Georgieva said Wednesday.

“We are very concerned about the El Nino that is hitting this year,” Georgieva said in an interview in Singapore. “We are concerned about food security. We are concerned about pressure on inflation coming from that door, from the door of food becoming more and more expensive.”

Georgieva said the IMF was getting ready to help if El Nino became a shock for vulnerable countries. She said some countries could be forced to rely on external financing and advised governments to be careful with limited fiscal capacity.

She said Pacific island countries, Bangladesh and poorer countries such as Laos were in a tougher position, and called for a coordinated global response.

El Nino is a natural warming of sea surfaces that recurs every two to seven years and can change winds, pressure and rainfall patterns worldwide. Central American countries are already dealing with drought, while Asian nations have faced disruption to monsoon rains and crop damage.

Georgieva also pointed to the risk of “dual exogenous shocks” from El Nino and rising energy prices linked to the US-Iran war.