https://www.polity.org.za
Deepening Democracy through Access to Information
Home / News / All News RSS ← Back
Close

Email this article

separate emails by commas, maximum limit of 4 addresses

Sponsored by

Close

Embed Video

High food prices pose new challenge for Africa - IMF

20th March 2008

By: Reuters

SAVE THIS ARTICLE      EMAIL THIS ARTICLE

Font size: -+

Higher global food and fuel prices pose new policy challenges for Sub-Saharan Africa because food represents a larger share of what poorer consumers buy, the International Monetary Fund said on Wednesday.

Food inflation in Africa was currently 2.8 percentage points higher than headline inflation, the IMF said. It suggested that figure could be higher since the latest increases in food prices had not yet been reflected in consumer price index data.

Advertisement

Policy responses would determine whether higher prices would translate into higher sustained inflation, it said, adding that for the moment, monetary policy was responding appropriately in most countries.

The fund also said social implications of rising food costs were evident in food-related unrest in Burkina Faso, Cameroon and Niger.

Advertisement

"But the spike in the prices of fuel and individual food commodities calls for policy responses that must be custom-tailored to each country's unique situation and whether the shock is temporary or permanent," the fund said.

"Temporary increases in food prices need not call for countervailing monetary policy, particularly if monetary policy is already accepted as credible," it added.

But there may be a need to tightened policies if sustained high good inflation started to have a significant second-round effects, the IMF said.

The effect of temporary price shocks could be mitigated by temporary and targeted subsidies, temporary tax measures, or more aid, the IMF said.

Permanent shocks require "over time a full pass-through of prices," it said, "depending on individual country circumstances, there may be a case for temporary, time-bound mitigating measures."

EMAIL THIS ARTICLE      SAVE THIS ARTICLE

To subscribe email subscriptions@creamermedia.co.za or click here
To advertise email advertising@creamermedia.co.za or click here

Comment Guidelines

About

Polity.org.za is a product of Creamer Media.
www.creamermedia.co.za

Other Creamer Media Products include:
Engineering News
Mining Weekly
Research Channel Africa

Read more

Subscriptions

We offer a variety of subscriptions to our Magazine, Website, PDF Reports and our photo library.

Subscriptions are available via the Creamer Media Store.

View store

Advertise

Advertising on Polity.org.za is an effective way to build and consolidate a company's profile among clients and prospective clients. Email advertising@creamermedia.co.za

View options

Email Registration Success

Thank you, you have successfully subscribed to one or more of Creamer Media’s email newsletters. You should start receiving the email newsletters in due course.

Our email newsletters may land in your junk or spam folder. To prevent this, kindly add newsletters@creamermedia.co.za to your address book or safe sender list. If you experience any issues with the receipt of our email newsletters, please email subscriptions@creamermedia.co.za