Project Description

ERISC PHASE II: How food prices link environmental constraints to sovereign credit risk





May, 2016

In the future, the world will likely suffer from higher and more volatile food prices, and more frequent food price shocks as a result of the growing imbalance between supply and demand. Growing populations and rising incomes will intensify the demand for food, while climate change and resource scarcity will disrupt food production. This report includes a ranking of 110 countries’ economic vulnerability, based on the impact of a food price shock on Gross Domestic Product (GDP), Consumer Price Index (CPI), and current account balance.

The five countries that will be worst hit if food commodity prices double are all in Africa – Benin, Nigeria, Cote d’Ivoire, Senegal and Ghana, in terms of the highest percentage loss to GDP. But China will see the most total amount of money wiped from its GDP of any country – $161 billion, equivalent to the total GDP of New Zealand. India will see the second highest loss to GDP – $49 billion, equivalent to the total GDP of Croatia.

The research was conducted in collaboration with UNEP FI, and six financial institutions: Caisse des Dépôts, Colonial First State, European Investment Bank, HSBC, Kempen, KfW, and S&P Global Ratings  with Cambridge Econometrics providing macroeconomic modeling.

Among the report’s other key findings are:

  • Overall, Egypt, Morocco and Philippines could suffer the most from a doubling of food prices in terms of the combined impact on GDP, current account balance and inflation.
  • 17 out of the 20 countries most at risk from a food price shock are in Africa.
  • Paraguay, Uruguay, Brazil, Australia, Canada and the US would benefit the most from a sharp increase in food commodity prices.
  • Globally, negative effects of a food price shock massively outweigh positive effects in absolute terms. While China could see an absolute reduction in GDP of $161 billion, the highest absolute positive effect on GDP, seen in the United States, is only $3 billion –50 times smaller than the impact on China.
  • In 23 countries, a doubling in food prices leads to a 10 per cent (or more) rise in the consumer price index.
  • Countries with higher sovereign credit ratings tend to be less exposed to risks resulting from a food price spike.
  • Countries whose populations have the highest consumption of natural resources and services, and are therefore most responsible for the environmental constraints that make future food prices higher and more volatile, tend to face the lowest risk exposure.



Top/Bottom 10 Countries
Effect of a rapid doubling in food commodity prices
Click on the red and green buttons to see each corresponding ranking.


On real GDP

Largest Negative Effect

Largest Positive Effect

Country% Change
  1. Benin –8.6%
  2. Nigeria –7.2%
  3. Côte d’Ivoire –7.0%
  4. Senegal –6.6%
  5. Ghana –6.5%
  6. Mozambique –6.1%
  7. Rwanda –5.5%
  8. Malawi –5.4%
  9. Ethiopia –5.4%
  10. Tanzania –5.2%

On current account

Largest Negative Effect

Largest Positive Effect

Country% Change
  1. Benin –11.9%
  2. Senegal –7.5%
  3. Côte d’Ivoire –7.1%
  4. Guinea –4.8%
  5. Jordan –3.7%
  6. Honduras –2.8%
  7. Cameroon –2.7%
  8. Kyrgyzstan –2.7%
  9. Jamaica –2.4%
  10. Burkina Faso –2.3%

On consumer
price index

Largest Impact


Country% Change
  1. Nigeria 47.8%
  2. Rwanda 46.5%
  3. Ghana 35.7%
  4. Ethiopia 32.3%
  5. Mozambique 29.0%
  6. Tanzania 30.0%
  7. Mozambique 29.0%
  8. Kenya 28.4%
  9. Lao PDR 24.9%
  10. Togo 23.9%










Project Partners