--- title: "El Niño Set to Upend the World Economy" description: "It doesn't take a butterfly flapping its wings to make waves half a world a way — just some warm ocean water." date: "2026-07-28" modified: "2026-07-28" authors: - name: "Joe Wilkins" job_title: "Correspondent" link: "https://futurism.com/authors/jwilkins" url: "https://futurism.com/science-energy/el-nino-world-economy-inflation-developing-countries" categories: - "Climate Change" - "Environment" - "Finance" - "Future Society" - "Science & Energy" --- # El Niño Set to Upend the World Economy ![A color-treated photograph of wildfires, worsened by this year's El Niño.]() *Shutterstock / Futurism* The West Pacific has swung back into an El Niño phase, bringing [nearly unprecedented heat]() to vast swaths of the globe. Some of El Niño's impacts are immediately apparent, or will be in the months to come: blistering high temps, of course, but also major amounts of rainfall for some, and extreme drought for others. Unfortunately, those weather patterns don't just come and go. They also have a major impact on agricultural production, from the plains of the American Midwest to the rice paddies of Southeast Asia — and, as a result, a huge influence on the global economy. As [*Reuters* observes](), El Niño conditions will likely have an inflationary effect on the economies of developing countries, as the ensuing weather flips typical rainfall totals on their head. In Asia, for example, rainfall totals are likely to be much lower than usual, a situation expected to wreak havoc on countries like India and Vietnam. With [India's weather bureau]() projecting the driest conditions in over a decade, this year's rice harvest is at risk. Lower rice yields would tighten supply, raising food prices for millions. Central banks, in turn, could be forced to keep borrowing rates high, in order to keep rising prices in check. "People are forecasting rate hikes for the second half of the year, especially for the South Asian countries, ​which are kind of the most impacted by El Niño such as India, Indonesia, Vietnam, Thailand," equity portfolio manager at Allspring Global Investments Gary Tan told *Reuters*. "El Niño is ​just going to make inflation more sticky." A similar situation is possible across Africa, *Reuters* warns, as agricultural sectors in countries like Kenya are particularly susceptible to weather disruptions. In today's incredibly connected economy, in other words, it doesn't take a butterfly flapping its wings to make waves half a world a way — just some [warm ocean water]() in the middle of the Pacific. **More on El Niño:** *[Scientists Propose Dimming Sun to Combat El Niño]()* ## Author At Futurism, I focus on the intersection of technology and power — examining the economics, history, and politics behind today’s dystopian headlines. As a writer, I’m interested in topics ranging from AI’s impact on labor to startups nobody asked for. My prior work includes bylines in Jacobin, Verso, and Blue Labyrinths. My work for Futurism has been cited by publications including Forbes, The Guardian, MIT Technology Review, Time, The Nation, Mother Jones, The Verge, and Wired. I grew up in Michigan, attending Central Michigan University as well as Ball State University, where I earned a master of music. I now live in Brooklyn with my girlfriend and our cat Ziti. On weekends, you can find me hunched over a cold pint arguing geopolitics with the other transplants. ### Author social links [Bluesky]()