WASHINGTON (Thomson Financial) - Rising inflation, especially in food, could have terrible consequences for the world if it continues and action needs to be taken to keep rising prices in check, the head of the International Monetary Fund said today.
'Food prices, if they go on like they are doing today ... the consequences will be terrible,' IMF managing director Dominque Strauss-Kahn said.
'Hundreds of thousands of people will be starving ... leading to disruption of the economic environment,' Strauss-Kahn told a news conference at the close of the IMF spring meeting here.
Development gains made in the past five or 10 years could be 'totally destroyed,' he said, warning that the issue goes beyond humanitarian concerns.
In recent months, rising food costs have lead to social unrest in several countries such as Haiti and Egypt as governments grapple with a growing crisis sparked by a whole series of price increases in basic commodities.
In the developing world, governments have been forced to increase subsidies for basic foodstuffs and fuels or to cut back on agricultural exports, as in Thailand with rice, in order to ease price pressures in their home markets. corbett.daly@thomson.com++tfn.newsdesk@thomson.com afp/wash COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.