On the Pass-through of Food Prices to Local Inflation in MENA Countries

This paper investigates the effects of global food price shocks to consumer prices in Middle East and North African (MENA) countries using a multiple regression model to examine the short- and long-term impact. The paper finds significant relationships between global food price and local inflation and these relationships vary dependent on the studied countries. The effect of GDP growth on CPI inflation is significant with different lags. We find that countries with a similar long-run effect are related with each other through synchronized business cycles. We could find evidence that the pass-through impact is different regarding the country-specific agriculture production level but not the income level.