The likelihood of an El Niño event in the second half of this year adds to upside risks to global inflation and downside risks to activity. For the advanced economies, higher prices of agricultural commodities could slow the decline in food inflation. But the risks are bigger in EMs where food has a higher weight in the CPI and where production could also be damaged.
In view of the wider interest, this Global Economics Update is also being sent to clients of our Emerging Markets and Commodities Overview services.
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