An economist warns that the ongoing conflict in the Middle East may lead to rising food prices and inflation, similar to the effects seen after Russia's invasion of Ukraine.
The conflict in the Middle East is escalating rapidly, leading to rising oil prices and a potential ripple effect on other essential commodities. Reports suggest that blockades in the Gulf of Hormuz, a crucial passage for one-fifth of the world's oil supplies, could trigger an inflationary crisis comparable to that observed during the Ukraine war. Czech economist Štěpán Křeček expresses concerns about the inevitability of this scenario impacting everyday life economically.
Currently, attention is primarily focused on increasing prices for gasoline and diesel; however, food prices are likely to follow suit. The rising costs of fertilizers are expected to diminish agricultural yield and subsequently inflate food prices. Moreover, global agricultural commodities are already witnessing price hikes, indicating that we may be on the brink of a similar food crisis as experienced four years ago when the Ukraine conflict first erupted, which not only sparked an energy crisis but a food crisis as well.
