Frederic Neumann

And that already is then putting upward pressure on global sugar prices because India is an important supplier to the global market.

That's right.

So we're seeing, of course, declines in fossil fuel prices like oil and gas because hopefully the Strait of Hormuz will remain open.

But at the same time, weather patterns like El Nino can put stress on hydropower.

And if you have an economy like Vietnam, for example, where a quarter of the electricity is generated by hydropower, that is water that's kept behind dams, that kind of runs turbines.

And if you have a lack of rainfall, then you have less hydropower generation.

And therefore,

We have one energy crisis being replaced by potentially another energy crisis.

One was just fossil fuel based.

The other one is hydropower based.

And that's all because of weather.

Well, the risk is that you're having these adverse weather events that put stress on infrastructure, leads to more volatile prices, and that ultimately reduces economic growth.

It also means that we need to spend more money to protect ourselves, and that means less money for other types of investments.

So overall, it really has risk of slowing down economic growth and raising prices at the same time, particularly for food, which is, of course, a necessity for millions and millions of people.

The price of nickel, of copper could be impacted by this if you have lack of water for mining operations, for example.

So the effects are multifold.

In general, it just forces, I think, governments to think harder about resilience.

Even though it's costly, you could argue that in the long term that could make economies better off because it just strengthens the underlying infrastructure against any type of shock.

But ultimately, in the short term, these events can be quite disruptive.

Thank you for having me.