Describe the impact of water shortage on the economy.

Water scarcity leads to food shortages while raising commodity prices thereby hindering trade with developing economies and in the long run cause civil unrest. Water scarcity has a direct impact on rain-fed and irrigated agriculture as well as livestock, and an indirect impact on food processing industries.

Increases in food prices and lack of water inflame regional conflicts and cause population migration to where water is readily accessible. Water scarcity leads to food shortages while raising commodity prices thereby hindering trade with developing economies and in the long run cause civil unrest.