What follows a pandemic, unemployment and emergency stimulus? Inflation, most likely

In the field of epidemiology, there is a saying: “If you’ve seen one pandemic, you’ve seen one pandemic.” But while all global disease outbreaks are epidemiologically unique, their likely economic consequences may be easier to discern.

The longer-term consequences, however, sometimes bear little relation to the immediate economic challenges arising from the pandemic and efforts to tackle it.

As governments around the world impose business lockdowns to cut the rate of Covid-19 transmission, the initial effect of the global pandemic has been an epidemic of joblessness. The economic legacy, however, might be price inflation.

Already, although the pandemic is still raging, there is a risk of food price inflation emerging. Qu Dongyu, the Chinese director general of the UN’s Food and Agriculture Organisation, last week argued for keeping global food supply chains moving. “Restricting trade is not only unnecessary, it would hurt producers and consumers and even create panic in the markets,” he said

Hopefully, nations will heed Qu’s warning, but Thai rice export prices hit a seven-year high last week, in part due to temporary export restrictions imposed by Vietnam and Cambodia.

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