Food price inflation nowcasting and monitoring

Abstract

Rising food prices may rapidly push vulnerable populations into food insecurity, especially in developing economies and in low-income countries, where a substantial share of the financial resources available to the poorest households is spent on food. To capture soaring food prices and help in designing mitigating measures, we developed two complementary products: a nowcasting model that estimates official food consumer price inflation up to the current month and a daily food price monitor that checks whether the growth rate of a few basic food commodities exceeds a statistical threshold. Both products were designed with the consideration that the rapid acquisition of data and the automated extraction of insights are indispensable tools for policymakers, particularly in times of crisis. Our framework is characterized by three key aspects. Firstly, we leverage two non-traditional data sources to emphasize the importance of real-time information: a crowdsourced repository of daily food prices and textual insights obtained from newspapers articles. Secondly, our framework offers a global perspective, encompassing 225 countries and territories, which enables the monitoring of food prices dynamics on a global scale. Thirdly, results are made accessible daily via an intuitive and user-friendly interactive dashboard.