IMF warns of rising unrest risk amid cost-of-living pressures
by@Reuters
Summary
On October 23, 2026, reports emerged highlighting growing discontent in emerging economies like Argentina and Sri Lanka, where despite economic reforms driving growth and attracting investors, living standards for many remain stagnant. In Buenos Aires, shop owner Gustavo Raul Perez noted that while inflation has dropped, his restocking costs have tripled, and the middle class has largely disappeared. Similarly, in Sri Lanka, although the economic crisis has passed, poverty levels remain above pre-crisis numbers, leaving citizens struggling with high costs of living. Experts warn that rising food, fuel, and energy prices could lead to civil unrest, as many citizens feel the burden of reforms that have not yet yielded tangible benefits for their daily lives.
Analysis
IMF: The International Monetary Fund is an international financial institution that provides policy advice and support to member countries. It has advocated for subsidy cuts and market liberalizations in emerging economies while its leadership notes persistent cost-of-living strains. Colombo: Colombo is the commercial capital of Sri Lanka. Local vendors there describe absorbing higher input costs to keep prices affordable for customers amid the country's post-crisis economic stabilization efforts. Sri Lanka: Sri Lanka is a South Asian nation that defaulted on its debt during a recent economic crisis. Reforms have helped restore some stability, yet poverty levels remain higher than before the crisis and citizens report ongoing financial pressures. Anass Sayad: Anass Sayad is a civil engineer based in Morocco. He has commented on uneven development, with visible infrastructure gains alongside calls for greater investment in education and healthcare. Buenos Aires: Buenos Aires is the capital and largest city of Argentina. It features in reports on emerging market reforms as the site where small business owners report higher restocking costs and diminished customer spending even as inflation has moderated and imports have increased. Torbjorn Soltvedt: Torbjorn Soltvedt is a risk analyst at Verisk Maplecroft. He has pointed to immediate pressures from higher food, fuel, and energy prices as key drivers of potential instability in emerging markets. Verisk Maplecroft: Verisk Maplecroft is a firm specializing in global risk analysis and political risk assessment. Its experts have highlighted how rising living costs from policy changes in emerging markets could trigger social unrest. Gustavo Raul Perez: Gustavo Raul Perez operates a hardware shop on the outskirts of Buenos Aires. His observations illustrate the gap between macroeconomic improvements and everyday affordability challenges faced by small business owners. Simon Quijano-Evans: Simon Quijano-Evans is an analyst at Macro Hive. He has noted that emerging economies had limited alternatives to implementing austerity and liberalization measures to avoid deeper investment losses. Kristalina Georgieva: Kristalina Georgieva is the managing director of the International Monetary Fund. She has warned that higher fuel and food costs combined with reduced development assistance are adding pressure on populations despite reform progress. Sirimodara Wadaramge Sriyakanthi: Sirimodara Wadaramge Sriyakanthi runs a food vending business in Colombo. She describes efforts to limit price increases for customers while managing personal expenses such as school fees. Development Gap: Investment spurred by reforms has supported growth yet leaves questions about whether sufficient jobs will be created for the large numbers of young people entering the workforce in developing countries. Reform Outcomes: Policy changes such as subsidy removals and market openings have attracted investors back to emerging economies but often raise immediate costs for households before broader benefits materialize. Unrest Pressures: Rising food, fuel, and energy expenses are felt directly by citizens and contribute to elevated risks of civil unrest across multiple emerging markets.
Categories
macropolitics