The impact of the cost-of-living crisis on people

15 June 2022

The war in Ukraine has led to a global cost-of-living crisis, which is rapidly constraining household budgets. As food prices rise, incomes at home fall. This has important implications for poverty and hunger levels, educational attainment and energy access.



These impacts are also highly regressive, as they affect the poorest households, as well as women and girls, the most. Its effects on food insecurity, malnutrition and hunger are particularly alarming in the current context.

High food and energy prices will affect the most vulnerable in society the most, especially in developing countries, in which more than 50% of the income of the poorest households is spent on food.

A great portion of the groups considered “non-poor” are also very vulnerable due to their close proximity to the poverty line. It is very important to include these groups, that are also hard hit by the crisis, in the safety nets and social protection networks, not only to help the poor but also to preclude further impoverishment from these vulnerable groups. Many of these vulnerable groups are in urban areas and thus often form the base of social instability processes.

A 10% increase in food prices erodes the buying power of these households by more than 5 per cent, or about as much as poor families in developing countries spend on average on health.