A new analysis by JPMorgan warns that the combination of a potential super El Niño event and a sharp rise in global oil prices could fuel another wave of inflation, posing risks to economic growth and food security worldwide. The financial institution noted that an exceptionally strong El Niño could disrupt agricultural production across major food-producing regions through droughts, floods and extreme heat, reducing harvests of crops such as rice, wheat, corn and sugar. At the same time, geopolitical tensions and constrained oil supplies could push energy prices higher, increasing transportation, manufacturing and household costs across both developed and developing economies.
The report highlights that climate-related shocks are becoming an increasingly important driver of global inflation alongside traditional economic factors. Higher food and fuel prices can disproportionately affect low-income households while placing additional pressure on central banks to balance inflation control with economic growth. Experts warn that strengthening climate resilience in agriculture, investing in diversified energy systems and improving supply chain preparedness will be essential to reducing the economic impacts of future climate extremes. The findings reinforce that climate change is no longer only an environmental challenge but also a growing financial and economic risk with global consequences. More