Goldman Sachs: with ‘Super Nino’, food prices in the EU could rise by 1.3% over two years
The impact on headline inflation was more modest, at 0.1%
(Il Sole 24 Ore Radiocor) - A particularly intense El Niño event could drive up food inflation in the eurozone over the next two years, with a limited but measurable impact on headline inflation as well. This is the finding of an analysis by Goldman Sachs, which suggests that a ‘very strong’ El Niño event, such as the one forecast for 2026 and associated with a temperature rise of around 1.65 degrees, could lead to a cumulative increase of 15.8 per cent in global wholesale prices for food commodities, an effect that would be fully felt by the second half of 2028. The pass-through to consumer prices would, however, be more modest. Estimates suggest that the commodity shock is likely to result in an increase of around 1.3 per cent in the food component of the euro area’s harmonised index of consumer prices, with most of the effect concentrated in the first 24 months. Overall, the impact on headline inflation would amount to around 0.1 percentage points in the two years following the shock.
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