The IMF warned ongoing El Nifio-driven extreme weather could further weaken
commodity markets, amplify high fertilizer prices and disrupt transport and
other climate-sensitive sectors. Past episodes show El Nifio tends to lift food
and commodity prices and slow economic activity, especially where food has a
large consumer-weight. Risks are concentrated in energy-importing emerging
markets and developing economies with limited fiscal space and weak external
buffers; sustained high commodity prices could widen current-account deficits
and increase exchange-rate stress. Higher inf could force central banks into
tighter policy, further weighing on growth.
