Soaring prices push economies to tipping point: IMF

WASHINGTON (Reuters) – Surging food and fuel prices have pushed some countries to a “tipping point,” the head of the International Monetary Fund warned on Tuesday, threatening hard-won efforts in many African countries to stabilize their economies.

“If food prices rise further and oil prices just stay the same, then some governments will be unable to feed people and at the same time maintain stability in their economy,” said Dominique Strauss-Kahn, managing director of the IMF.

[…]The problem is especially severe in some Sub-Saharan African countries and threatens to wipe out gains made over the past decade to reduce poverty and strengthen their economies. It also risks driving up the debts of poor countries as governments increase borrowing to deal with the higher prices.

The IMF has identified 18 countries in sub-Saharan Africa that have been hard-hit by higher prices that will need balance of payments and budget support.

Reuters