How El Nino threatens emerging market wealth

Raging storm: Residents wade through water as flash floods hit the city of Trujillo, 570km north of Lima in Peru due to the El Nino. The climate phenomenon, historically, has raised global food prices by more than 6% after one year. — AFP

LONDON: Countries around the world are battling heatwaves and floods fuelled by El Nino, a naturally occurring climate phenomenon that has a 90% probability of persisting in the second half of 2023, according to the World Meteorological Organisation.

The worldwide impact can be enormous, but the stakes are higher for emerging markets, which are more exposed to swings in food and energy prices and production and often have smaller fiscal buffers that limit their ability to cushion the impact.