La Niña Could Have a Big Impact on the NZ Economy
Expect impacts on short-term demand and supply patterns
Could result in colder-than-average winter temperatures in North America and North Asia
A NZ Research on Thursday flagged that the likely development of a La Niña weather system into the second half of the year could have sizeable impacts. La Niña is a weather pattern that can cause changes in temperature and precipitation patterns around the world.
La Niña often results in colder-than-average winter temperatures in North America and North Asia, which can lead to short-term spikes in demand for energy and other goods. La Niña can also lead to changes in agricultural yields, which can affect food prices.
The last two La Niñas have also occurred at a time of generally rising commodity prices. This has led to concerns that La Niña could further contribute to inflation. La Niña years can also bring big shifts to weather in both Brazil and the US, the world's two biggest suppliers of key agricultural commodities. This could lead to disruptions in supply chains and higher food prices.
The likely development of La Niña is a reminder of the importance of being prepared for extreme weather events. Businesses and consumers should take steps to mitigate the potential impacts of La Niña, such as by stockpiling goods and preparing for possible power outages.
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