El Nino threatens global weather stability and Indonesian inflation

The El Nino phenomenon is projected to have significant global and economic impacts. The World Meteorological Organization (WMO) warns that El Nino could intensify through 2027, potentially becoming the strongest ever recorded. WMO Secretary-General Celeste Saulo stated that current trends may exceed all data tracked over the last four decades, increasing the risk of extreme weather patterns worldwide.

In Indonesia, Bank Mandiri has forecasted that El Nino could drive headline inflation to 3.5 percent by the end of 2026. The bank specifically highlighted risks to volatile food inflation, which could reach 6 percent due to impacts on horticultural commodities such as shallots and red chilies. Despite these risks, the bank noted that the impact should remain within the central bank's target range.