JPMorgan warns super El Niño could boost global inflation

JPMorgan economists warned that a rapidly intensifying El Niño has an 81% chance of becoming a “very strong” or “super” event by year‑end and a 97% chance of persisting into 2027. Combined with higher energy prices driven by the Iran‑related oil shock, the pattern could add about 0.3 percentage points to global headline inflation next year. The bank estimates a super El Niño alone would raise global food inflation by roughly 0.7 percentage points at its peak; together with the energy shock the impact could double to 1.3‑1.5 percentage points. Emerging markets in Asia and Latin America – notably India, Indonesia, Brazil, Colombia, Taiwan and South Korea – are projected to bear the brunt because food constitutes a larger share of consumer baskets. In advanced economies, the main driver of higher food prices is expected to be energy costs rather than direct weather effects. JPMorgan projects that a 5 % annualised rise in food prices in the first half of 2027 would add about 0.6 percentage points to global headline inflation, slowing the expected decline in inflation rates. HSBC analysts echoed the warning, describing the situation as a “climate black‑swan” risk, and noted that major Asian rice importers are expanding reserves in anticipation of possible shortages.