The Federal Reserve has embarked on an aggressive campaign to raise interest rates as it tries to tame the most rapid inflation in decades, an effort the central bank sees as necessary to restore price stability in the United States.
But what the Fed does at home reverberates across the globe, and its actions are raising the risks of a global recession while causing economic and financial pain in many developing countries.
Other central banks in advanced economies, from Australia to the eurozone, are also lifting rates rapidly to fight their inflation. And as the Fed’s higher interest rates attract money to the United States — pumping up the value of the dollar — emerging-market economies are being forced to raise their own borrowing costs to try to stabilize their currencies to the extent possible.
Altogether, it is a worldwide push toward more expensive money unlike anything seen before in the 21st century, one that is likely to have serious ramifications.
warned the damage could be particularly acute in poorer nations. Developing economies had already been dealing with a cost-of-living crisis because of soaring food and fuel prices, and now their American imports are growing steadily more expensive as the dollar marches higher.
The Fed’s moves have spurred market volatility and worries about financial stability, as higher rates elevate the value of the U.S. dollar, making it harder for emerging-market borrowers to pay back their dollar-denominated debt.
It is a recipe for globe-spanning turmoil and even recession. Despite that, the Fed is poised to continue raising interest rates. That’s because the Fed, like central banks around the world, is in charge of domestic economy goals: It’s supposed to keep inflation slow and steady while fostering maximum employment. While occasionally called “central banker to the world” because of the dollar’s foremost position, the Fed goes about its day-to-day business with its eye squarely on America.
loss of purchasing power over time, meaning your dollar will not go as far tomorrow as it did today. It is typically expressed as the annual change in prices for everyday goods and services such as food, furniture, apparel, transportation and toys.
What causes inflation? It can be the result of rising consumer demand. But inflation can also rise and fall based on developments that have little to do with economic conditions, such as limited oil production and supply chain problems.
Is inflation bad? It depends on the circumstances. Fast price increases spell trouble, but moderate price gains can lead to higher wages and job growth.
Can inflation affect the stock market? Rapid inflation typically spells trouble for stocks. Financial assets in general have historically fared badly during inflation booms, while tangible assets like houses have held their value better.
The threat facing the global economy — including the Fed’s role in it — is expected to dominate the conversation next week as economists and government officials convene in Washington for the annual meeting of the International Monetary Fund and World Bank.
In a speech at Georgetown University on Thursday, Kristalina Georgieva, the managing director of the I.M.F., offered a grim assessment of the world economy and the tightrope that central banks are walking.
“Not tightening enough would cause inflation to become de-anchored and entrenched — which would require future interest rates to be much higher and more sustained, causing massive harm on growth and massive harm on people,” Ms. Georgieva said. “On the other hand, tightening monetary policy too much and too fast — and doing so in a synchronized manner across countries — could push many economies into prolonged recession.”
Noting that inflation remains stubbornly high and broad-based, she added: “Central banks have to continue to respond.”
The World Bank warned last month that simultaneous interest-rate increases around the world could trigger a global recession next year, causing financial crises in developing economies. It urged central banks in advanced economies to be mindful of the cross-border “spillover effects.”
“To achieve low inflation rates, currency stability and faster growth, policymakers could shift their focus from reducing consumption to boosting production,” David Malpass, the World Bank president, said.
Trade and Development Report said.
So far, major central banks have shown little appetite for stopping their inflation-busting campaigns. The Fed, which has made five rate increases this year, has signaled that it plans to raise borrowing costs even higher. Most officials expect to increase rates by at least another 1.25 percentage points this year, taking the policy rate to a range of 4.25 to 4.5 percent from the current 3 to 3.25 percent.
Even economies that are facing a pronounced slowdown have been lifting borrowing costs. The European Central Bank raised rates three-quarters of a point last month, even though the continent is approaching a dark winter of slowing growth and crushing energy costs.
according to the World Bank. Food costs in particular have driven millions further into extreme poverty, exacerbating hunger and malnutrition. As the dollar surge makes a range of imports pricier for emerging markets, that situation could worsen, even as the possibility of financial upheaval increases.
“Low-income developing countries in particular face serious risks from food insecurity and debt distress,” Ngozi Okonjo-Iweala, director-general of the World Trade Organization, said during a news conference this week.
Understand Inflation and How It Affects You
In Africa, officials have been urging the I.M.F. and Group of 20 nations to provide more emergency assistance and debt relief amid inflation and rising interest rates.
“This unprecedented shock further destabilizes the weakest economies and makes their need for liquidity even more pressing, to mitigate the effects of widespread inflation and to support the most vulnerable households and social strata, especially young people and women,” Macky Sall, chairman of the African Union, told leaders at the United Nations General Assembly in September.
To be sure, central bankers in big developed economies like the United States are aware that they are barreling over other economies with their policies. And although they are focused on domestic goals, a severe weakening abroad could pave the way for less aggressive policy because of its implications for their own economic outlooks.
Waning demand from abroad could ease pressure on supply chains and reduce prices. If central bankers decide that such a chain reaction is likely to weigh on their own business activity and inflation, it may give them more room to slow their policy changes.
“The global tightening cycle is something that the Fed has to take into account,” said Megan Greene, global chief economist for the Kroll consulting firm. “They’re interested in what is going on in the rest of the world, inasmuch as it affects their ability to achieve their targets.”
But many global economic officials — including those at the Fed — remain focused on very high inflation. Investors expect them to make another large rate increase when they meet on Nov. 1-2.
“We’re very attentive” to international spillovers to both emerging markets and advanced economies, Lisa D. Cook, a Fed governor, said during a question-and-answer session on Thursday. “But our mandate is domestic. So we’re very focused on inflation as it evolves in this country.”
Raghuram Rajan, a former head of India’s central bank and now an economist at the University of Chicago, has in the past pushed the Fed to take foreign conditions into account as it sets policy. He still thinks that measures like bond-buying should be pursued with an eye on global spillovers.
But amid high inflation, he said, central banks are required to pay attention to their own mandates to achieve price stability — even if that makes for a stronger dollar, weaker currencies and more pain abroad.
“The basic problem is that the world of monetary policy dances to the Fed’s tune,” Mr. Rajan said, later adding: “This is a problem with no easy solutions.”
This past week brought home the magnitude of the overlapping crises assailing the global economy, intensifying fears of recession, job losses, hunger and a plunge on stock markets.
At the root of this torment is a force so elemental that it has almost ceased to warrant mention — the pandemic. That force is far from spent, confronting policymakers with grave uncertainty. Their policy tools are better suited for more typical downturns, not a rare combination of diminishing economic growth and soaring prices.
Major economies including the United States and France reported their latest data on inflation, revealing that prices on a vast range of goods rose faster in June than anytime in four decades.
China reported that its economy, the world’s second-largest, expanded by a mere 0.4 percent from April through June compared with the same period last year. That performance — astonishingly anemic by the standards of recent decades — endangered prospects for scores of countries that trade heavily with China, including the United States. It reinforced the realization that the global economy has lost a vital engine.
The specter of slowing economic growth combined with rising prices has even revived a dreaded word that was a regular part of the vernacular in the 1970s, the last time the world suffered similar problems: stagflation.
Most of the challenges tearing at the global economy were set in motion by the world’s reaction to the spread of Covid-19 and its attendant economic shock, even as they have been worsened by the latest upheaval — Russia’s disastrous attack on Ukraine, which has diminished the supply of food, fertilizer and energy.
“The pandemic itself disrupted not only the production and transportation of goods, which was the original front of inflation, but also how and where we work, how and where we educate our children, global migration patterns,” said Julia Coronado, an economist at the University of Texas at Austin, speaking this past week during a discussion convened by the Brookings Institution in Washington. “Pretty much everything in our lives has been disrupted by the pandemic, and then we layer on to that a war in Ukraine.”
Great Supply Chain Disruption.
meat production to shipping exploited their market dominance to rack up record profits.
The pandemic prompted governments from the United States to Europe to unleash trillions of dollars in emergency spending to limit joblessness and bankruptcy. Many economists now argue that they did too much, stimulating spending power to the point of stoking inflation, while the Federal Reserve waited too long to raise interest rates.
8 Signs That the Economy Is Losing Steam
Card 1 of 9
Worrying outlook. Amid persistently high inflation, rising consumer prices and declining spending, the American economy is showing clear signs of slowing down, fueling concerns about a potential recession. Here are other eight measures signaling trouble ahead:
Consumer confidence. In June, the University of Michigan’s survey of consumer sentiment hit its lowest level in its 70-year history, with nearly half of respondents saying inflation is eroding their standard of living.
The housing market. Demand for real estate has decreased, and construction of new homes is slowing. These trends could continue as interest rates rise, and real estate companies, including Compass and Redfin, have laid off employees in anticipation of a downturn in the housing market.
Copper. A commodity seen by analysts as a measure of sentiment about the global economy — because of its widespread use in buildings, cars and other products — copper is down more than 20 percent since January, hitting a 17-month low on July 1.
Oil. Crude prices are up this year, in part because of supply constraints resulting from Russia’s invasion of Ukraine, but they have recently started to waver as investors worry about growth.
The bond market. Long-term interest rates in government bonds have fallen below short-term rates, an unusual occurrence that traders call a yield-curve inversion. It suggests that bond investors are expecting an economic slowdown.
Now playing catch-up, central banks like the Fed have moved assertively, lifting rates at a rapid clip to try to snuff out inflation, even while fueling worries that they could set off a recession.
Given the mishmash of conflicting indicators found in the American economy, the severity of any slowdown is difficult to predict. The unemployment rate — 3.6 percent in June — is at its lowest point in almost half a century.
American consumers have enhanced fears of a downturn. This past week, the International Monetary Fund cited weaker consumer spending in slashing expectations for economic growth this year in the United States, from 2.9 percent to 2.3 percent. Avoiding recession will be “increasingly challenging,” the fund warned.
Orwellian lockdowns that have constrained business and life in general. The government expresses resolve in maintaining lockdowns, now affecting 247 million people in 31 cities that collectively produce $4.3 trillion in annual economic activity, according to a recent estimate from Nomura, the Japanese securities firm.
But the endurance of Beijing’s stance — its willingness to continue riding out the economic damage and public anger — constitutes one of the more consequential variables in a world brimming with uncertainty.
sanctions have restricted sales of Russia’s enormous stocks of oil and natural gas in an effort to pressure the country’s strongman leader, Vladimir V. Putin, to relent. The resulting hit to the global supply has sent energy prices soaring.
The price of a barrel of Brent crude oil rose by nearly a third in the first three months after the invasion, though recent weeks have seen a reversal on the assumption that weaker economic growth will translate into less demand.
major pipeline carrying gas from Russia to Germany cut the supply sharply last month, that heightened fears that Berlin could soon ration energy consumption. That would have a chilling effect on German industry just as it contends with supply chain problems and the loss of exports to China.
euro, which has surrendered more than 10 percent of its value against the dollar this year. That has increased the cost of Europe’s imports, another driver of inflation.
ports from the United States to Europe to China.
“Everyone following the economic situation right now, including central banks, we do not have a clear answer on how to deal with this situation,” said Kjersti Haugland, chief economist at DNB Markets, an investment bank in Norway. “You have a lot of things going on at the same time.”
Understand Inflation and How It Impacts You
The most profound danger is bearing down on poor and middle-income countries, especially those grappling with large debt burdens, like Pakistan, Ghana and El Salvador.
As central banks have tightened credit in wealthy nations, they have spurred investors to abandon developing countries, where risks are greater, instead taking refuge in rock-solid assets like U.S. and German government bonds, now paying slightly higher rates of interest.
This exodus of cash has increased borrowing costs for countries from sub-Saharan Africa to South Asia. Their governments face pressure to cut spending as they send debt payments to creditors in New York, London and Beijing — even as poverty increases.
U.N. World Food Program declared this month.
Among the biggest variables that will determine what comes next is the one that started all the trouble — the pandemic.
The return of colder weather in northern countries could bring another wave of contagion, especially given the lopsided distribution of Covid vaccines, which has left much of humanity vulnerable, risking the emergence of new variants.
So long as Covid-19 remains a threat, it will discourage some people from working in offices and dining in nearby restaurants. It will dissuade some from getting on airplanes, sleeping in hotel rooms, or sitting in theaters.
Since the world was first seized by the public health catastrophe more than two years ago, it has been a truism that the ultimate threat to the economy is the pandemic itself. Even as policymakers now focus on inflation, malnutrition, recession and a war with no end in sight, that observation retains currency.
“We are still struggling with the pandemic,” said Ms. Haugland, the DNB Markets economist. “We cannot afford to just look away from that being a risk factor.”
Even if you didn’t experience the famine personally you must have been deeply aware of it and affected by it.
A thousand percent. First of all, you have to remember we come from massive families. My mom has 24 siblings. And you grow up very much aware of it. I grew up in a country where fuel was rationed, where food, sugar, toilet paper was rationed no matter who you are. It didn’t matter if you lived in Addis or outside of Addis. When toilet paper shortages happened during Covid and everybody was running to stock up, I was like, “I don’t know why you’re stocking up. I have like 80 rolls of toilet paper.”
People were like, “Why do you have 80 rolls of toilet paper?” And I was like, “Is that not how one lives in life? In fear that things might run out?” But it is how we were raised, very much aware that you can’t take anything for granted, that anything can disappear. We had neighbors that disappeared.
How did you wind up coming to the United States for college?
I studied really, really hard. I wanted to get out. My parents sacrificed absolutely everything to send us to the best school in the country, and I knew every day that my obligation to them was to do well, because they gave up most of their income to make sure we went to that school.
Also, my dad was born in an Italian prison. My grandfather orchestrated the plot to kill General Graziani when Mussolini tried to colonize Ethiopia, and it ended up costing his life. They assassinated my grandfather when my grandmother was pregnant with my dad, and they took her as a prisoner of war to Italy, and she gave birth to my dad in an Italian prison. So I was raised in a pretty strong family, in that fighting for survival kind of way, and I just felt like I owed it to my family to do well in life.
When you joined Morgan Stanleydid you figure you wanted to be in finance for the rest of your life, or were you saying, “I got to get out of here as fast as I can”?
I decided that the only job I would take in finance would be to work in commodities. It was the only section of finance that I felt was connected to the real world and all the things I cared about. One day I got up and I decided I was ready to trade. So I went to my boss and said, “Hey, you’re going to hire me to trade natural gas.” He was like, “I’m not hiring.” And I was like, “No, no, you’re going to hire me.” And he did, so I started trading gas, and then he got promoted, and I took over that business.
RIO DE JANEIRO — Rail-thin teenagers hold placards at traffic stops with the word for hunger — fome — in large print. Children, many of whom have been out of school for over a year, beg for food outside supermarkets and restaurants. Entire families huddle in flimsy encampments on sidewalks, asking for baby formula, crackers, anything.
A year into the pandemic, millions of Brazilians are going hungry.
The scenes, which have proliferated in the last months on Brazil’s streets, are stark evidence that President Jair Bolsonaro’s bet that he could protect the country’s economy by resisting public health policies intended to curb the virus has failed.
From the start of the outbreak, Brazil’s president has been skeptical of the disease’s impact, and scorned the guidance of health experts, arguing that the economic damage wrought by the lockdowns, business closures and mobility restrictions they recommended would be a bigger threat than the pandemic to the country’s weak economy.
That trade-off led to one of the world’s highest death tolls, but also foundered in its goal — to keep the country afloat.
ripping through the social fabric, setting wrenching records, while the worsening health crisis pushes businesses into bankruptcy, killing jobs and further hampering an economy that has grown little or not at all for more than six years.
a study of privation during the pandemic by a network of Brazilian researchers focused on the issue.
Brazil’s Institute of Geography and Statistics.
At first the family managed by spending their government assistance carefully, she said, but this year, once the payments were cut, they struggled.
“There is no work,” she said. “And the bills keep coming.”
Mr. Bolsonaro called those measures “extreme” and warned that they would result in malnutrition.
The president also dismissed the threat of the virus, sowed doubts about vaccines, which his government has been slow to procure, and often encouraged crowds of supporters at political events.
As a second wave of cases this year led to the collapse of the health care system in several cities, local officials again imposed a raft of strict measures — and found themselves at war with Mr. Bolsonaro.
“People have to have freedom, the right to work,” he said last month, calling the new quarantine measures imposed by local governments tantamount to living in a “dictatorship.”
Early this month, as the daily death toll from the virus sometimes surpassed 4,000, Mr. Bolsonaro acknowledged the severity of the humanitarian crisis facing his country. But he took no responsibility and instead faulted local officials.
“Brazil is at the limit,” he said, arguing that the blame lay with “whoever closed everything.”
But economists said that the argument that restrictions intended to control the virus would worsen Brazil’s economic downturn was “a false dilemma.”
In an open letter addressed to Brazilian authorities in late March, more than 1,500 economists and businesspeople asked the government to impose stricter measures, including lockdown.
Laura Carvalho, an economist, published a study showing that restrictions can have a negative short-term impact on a country’s financial health, but that, in the long run, it would have been a better strategy.
“If Bolsonaro had carried out lockdown measures, we would have moved earlier from the economic crisis,” said Ms. Carvalho, a professor at the University of São Paulo.
Mr. Bolsonaro’s approach had a broadly destabilizing effect, said Thomas Conti, lecturer at Insper, a business school.
“The Brazilian real was the most devalued currency among all developing countries,” Mr. Conti said. “We are at an alarming level of unemployment, there is no predictability to the future of the country, budget rules are being violated, and inflation grows nonstop.”
campaign called Tem Gente Com Fome, or People are Going Hungry, with the aim of raising money from companies and individuals to get food baskets to needy people across the country.
Mr. Belchior, one of the founders, said the campaign was named after a poem by the writer and artist Solano Trindade. It describes scenes of misery viewed as a train in Rio de Janeiro makes its way across poor neighborhoods where the state has been all but absent for decades.
“Families are increasingly pleading for earlier food deliveries,” said Mr. Belchior. “And they’re depending more on community actions than the government.”
Carine Lopes, 32, the president of a community ballet school in Manguinhos, a low-income, working-class district of Rio de Janeiro, has responded to the crisis by turning her organization into an impromptu relief center.
Since the beginning of the pandemic, the price of basic products rose dramatically at nearby stores, she said. The cost of cooking oil more than tripled. A kilogram of rice goes for twice as much. As meat became increasingly prohibitive, Sunday outdoor cookouts became a rarity in the neighborhood.
Long used to fielding calls from parents who desperately wanted a slot for their children at the ballet school, Ms. Lopes has gotten used to a very different appeal. Old acquaintances and strangers text her daily asking about the food baskets the ballet school has been distributing weekly.
“These moms and dads are only thinking about basic things now,” she said. “They call and say: ‘I’m unemployed. I don’t have anything else to eat this week. Is there anything you can give us?’”
When the virus finally recedes, the poorest families will have the hardest time bouncing back, she said.
Ms. Lopes despairs thinking of students who have been unable to tune in to online classes in households that have no internet connection, or where the only device with a screen belongs to a working parent.
“No one will be able to compete for a scholarship with a middle-class student who managed to keep up with classes using their good internet and their tablets,” she said. “Inequality is being exacerbated.”
Long before the coronavirus hit, nutrition programs that served the nation’s older adults struggled to keep up with a growing demand. Often, they could not.
In Charlotte, N.C., and nine surrounding counties, for example, the waiting list for Meals on Wheels averaged about 1,200 people. But Linda Miller, director of the Centralina Area Agency on Aging, which coordinates the program, always assumed the actual need was higher.
She knew some clients skipped meals because they couldn’t travel to a senior center for a hot lunch every weekday; some divided a single home-delivered meal to serve as both lunch and dinner.
Some never applied for help. “Just like with food stamps, which are underused,” Ms. Miller said, “people are embarrassed: ‘I worked hard all my life; I don’t want charity.’”
5.4 million older recipients.
For years, advocates for older adults have lobbied Congress for more significant federal help. Although the Older Americans Act has enjoyed bipartisan support, small annual upticks in appropriations left 5,000 local organizations constantly lagging in their ability to feed seniors.
From 2001 to 2019, funding for the Older Americans Act rose an average of 1.1 percent annually — a 22 percent increase over almost two decades, according to an analysis by the AARP Public Policy Institute. But adjusted for inflation, the funding for nutrition services actually fell 8 percent. State and local matching funds, foundation grants and private donations helped keep kitchens open and drivers delivering, but many programs still could not bridge their budget gaps.
food insecure,” meaning they had limited or uncertain access to adequate food.
And that shortfall was before the pandemic. Once programs hastily closed congregant settings last spring, a Meals on Wheels America survey found that nearly 80 percent of the programs reported that new requests for home-delivered meals had at least doubled; waiting lists grew by 26 percent.
Along with money, the Covid relief legislation gave these local programs needed flexibility. Normally, to qualify for Meals on Wheels, homebound clients must require assistance with activities of daily living. The emergency appropriations allowed administrators to serve less frail seniors who were following stay-at-home orders, and to transfer money freely from congregant centers to home delivery.
Even so, the increased caseloads, with people who had never applied before seeking meals, left some administrators facing dire decisions.
In Northern Arizona, about 800 clients were receiving home-delivered meals in February 2020. By June, that number had ballooned to 1,265, including new applicants as well as those who had previously eaten at the program’s 18 now-shuttered senior centers. Clients were receiving 14 meals each week.
By summer, despite federal relief funds, “I was out of money,” Ms. Beals-Luedtka said. She faced the grim task of telling 342 seniors, who had been added to the rolls for three emergency months, that she had to remove them. “People were crying on the phone,” she recalled. “I literally had a man say he was going to commit suicide.” (She reinstated him.) Even those who remained started receiving five meals a week instead of 14.
diminish loneliness and help keep seniors out of expensive nursing homes. They also may help reduce falls, although those findings were based on a small sample and did not achieve statistical significance.
Interestingly, Dr. Thomas’s research found daily meal deliveries had greater effects than weekly or twice-monthly drop-offs of frozen meals, a practice many local organizations have adopted to save money.
Frail or forgetful clients may have trouble storing, preparing and remembering to eat frozen meals. But the primary reason daily deliveries pay off, her study shows, is the regular chats with drivers.
“They build relationships with their clients,” Dr. Thomas said. “They might come back later to fix a rickety handrail. If they’re worried about a client’s health, they let the program know. The drivers are often the only people they see all day, so these relationships are very important.”
a prepandemic evaluation found.
So while program administrators relish a rare opportunity to expand their reach, they worry that if Congress doesn’t sustain this higher level of appropriations, the relief money will be spent and waiting lists will reappear.
“There’s going to be a cliff,” Ms. Beals-Luedtka said. “What’s going to happen next time? I don’t want to have to call people and say, ‘We’re done with you now.’ These are our grandparents.”
BEIRUT, Lebanon — In normal times, Ziad Hassan, a grocery store manager in Beirut, would get a daily email from his chain’s management telling him which prices needed to be adjusted and by how much.
But as Lebanon’s currency has collapsed, sending the economy into a tailspin, the emails have come as often as three times a day, ordering price increases across the store.
“We have to change everything,” an exasperated Mr. Hassan said, adding that his employees often weren’t even able to finish marking one price increase before the next one arrived. “It’s crazy.”
The country’s economic distress grew more acute last week as the Lebanese pound sank to 15,000 to the dollar on the black market — its lowest level ever — sucking value from people’s salaries as prices for once affordable goods soared out of reach. It has since rebounded to about 12,000.
A catastrophic explosion in Beirut’s port in August, which killed 190 people and left a large swath of the capital in ruins, only deepened the misery.
In a country where most products are imported, the currency collapse has left no sector unaffected.
the United Nations said that more than 55 percent of Lebanon’s population had become poor, nearly double the number from the year before. Extreme poverty had increased threefold to 23 percent. And the situation has worsened since.
said in November that food prices in Lebanon had increased 423 percent since October 2019, the largest jump since monitoring began in 2007. Prices have continued to rise since, putting acute pressure on the poor.
designated in October to form a new government. But he has made little progress, despite 17 meetings to discuss political horse trading with President Michel Aoun. LastThursday, they agreed to meet again on Monday.
Jihad Sabat, 48, has watched the decline from the window of the Beirut butcher shop he has run since 1997. Over the last year, he said, the price of meat has kept rising while the number of customers has dwindled.
A pound of beef now costs more than three times what it would have before the crisis, he said — more than three times what it cost before the crisis. He has also seen a rise in people wanting to buy on credit and interested in taking bones to boil for soup.
“Meat has become a luxury,” he said.
He accused the country’s politicians of stealing the state’s money through corrupt schemes and criticized them for failing to stabilize the economy.
A friend hanging out in the shop interjected, “The problem is the people.” Mr. Sabat nodded.
“That’s an essential point,” he said. “If there were elections tomorrow, the same people would be back.”
In the grocery store, Mr. Hassan, the manager, said his branch sold less meat every month and more lentils, even though they, too, are imported and cost five times more than before the crisis.
Fights have broken out in the aisles over staples like rice, sugar and cooking oil subsidized by the government, he said. And it is common for customers to get sticker shock in the checkout lane when they realize they can afford only a few essentials.
“I don’t know how people keep going,” he said. “But it will eventually cause an explosion.”
PARIS — Amandine Chéreau hurried from her cramped student apartment in suburban Paris to catch a train for an hourlong trip into the city. Her stomach rumbled with hunger, she said, as she headed for a student-run food bank near the Bastille, where she joined a snaking line with 500 young people waiting for handouts.
Ms. Chéreau, 19, a university student, ran out of savings in September after the pandemic ended the babysitting and restaurant jobs she had relied on. By October, she had resorted to eating one meal a day, and said she had lost 20 pounds.
“I have no money for food,” said Ms. Chéreau, whose father helps pay her tuition and rent, but couldn’t send more after he was laid off from his job of 20 years in August. “It’s frightening,” she added, as students around her reached for vegetables, pasta and milk. “And it’s all happening so fast.”
As the pandemic begins its second year, humanitarian organizations in Europe are warning of an alarming rise in food insecurity among young people, following a steady stream of campus closings, job cuts and layoffs in their families. A growing share are facing hunger and mounting financial and psychological strain, deepening disparities for the most vulnerable populations.
intensifying crisis over how to meet their basic dietary needs. As the global economy struggles to rebound from the worst recession since World War II, hunger is on the rise.
In the United States, nearly one in eight households doesn’t have enough to eat. People in already food-starved countries face a greater crisis, with food insecurity in the developing world expected to nearly double to 265 million people, according to the United Nations World Food Program.
In France, Europe’s second-largest economy, half of young adults now have limited or uncertain access to food. Nearly a quarter are routinely skipping at least one meal a day, according to le Cercle des Économistes, a French economic think tank that advises the government.
acknowledged a growing crisis after undergraduate and graduate students demonstrated in cities across France, where higher education is seen as a right and the state finances most costs. He announced a rapid relief plan, including 1-euro meals daily at university cafeterias, psychological support and a review of financial aid for those facing a “lasting and notable decline in family income.”
Linkee, a nationwide food bank that set up new services dedicated to students who cannot get enough food. “Students have become the new face of this precariousness,” he said.
Food insecurity among students was not uncommon before the pandemic. But the problem has ballooned since European countries imposed national lockdowns last spring to contain the coronavirus.
Aid organizations that mainly fed refugees, the homeless and people below the poverty line have refocused operations to also meet a surge in demand among youth. At the Restos du Coeur, one of France’s largest food banks, with 1,900 outlets, the number of young adults under 25 lining up for meals has risen to become nearly 40 percent of the total.
Over eight million people in France visited a food bank last year, compared with 5.5 million in 2019. Food aid demand across Europe has surged by 30 percent, according to the European Food Banks Federation.
While the government subsidizes campus meals, it doesn’t provide food pantries. As the cost of staying fed grows insurmountable for students with little or no income, university administrators have turned to aid groups for help fighting hunger.
The pandemic has wiped out jobs in restaurants, tourism and other hard-hit sectors that were once easily accessible to young people. Two-thirds have lost work that helped them make ends meet, according to the National Observatory of Student Life.
limit mass layoffs and prevent bankruptcies. But that hasn’t shielded parents from the recession’s widening toll.
Co’p1/Solidarités Étudiantes, the food bank Ms. Chéreau visited, opened near the Bastille in October when six students from Paris Sorbonne University banded together after seeing more of their peers go hungry.
Aided by the Paris mayor’s office and the Red Cross, they negotiated donations from supermarkets and food companies like Danone. Now, 250 student volunteers organize pasta, cereal, baguettes, milk, soda, vegetables and sanitary items to give to 1,000 students a week — though the need is five times greater, said Ulysse Guttmann-Faure, a law student and a founder of the group. Students go online to reserve a place in the line.
“At first, it took three days for these slots to fill up,” he said. “Now, they’re booked in three hours.”
Food banks like these, run by student volunteers for other students, have become a rare bright spot for thousands who have been struggling silently to confront the psychological toll of living with the pandemic.
Thomas Naves, 23,a philosophy major on a scholarship at Nanterre University, said he felt abandoned and isolated taking online classes for months at a time in a tiny studio.
When his student jobs were cut, he began seeking out food banks that set up at his campus twice a week. There, he found not only desperately needed meals, but a way to escape loneliness and cope with his growing distress. His parents were both ill, and were themselves barely making ends meet.
Mr. Naves settled behind a small table in his student lodging one recent afternoon to eat a microwaved curry he had gotten from the campus food pantry. In his closet was a small stock of donated pasta and canned goods — enough to eat several more meals.
“Going to the food bank is the only option to feed myself,” he said.
“But meeting other students in my situation made me realize that we are all sharing this suffering together.”