The surge in international prices on energy and food, which were amplified by Russia’s invasion of Ukraine, triggered a cost-of-living crisis, and constituted significant terms-of-trade shock for many countries. Despite some moderation in prices at the turn of 2023, global prices on main products such as energy and food, which account for significant shares of household consumption baskets, remain elevated. These developments have a disproportionate impact on low-income households. During 2022, the shock triggered swift policy actions by governments with the aim to mitigate the impact on households and firms. Governments with existing broad-based price subsidies on energy and food continued maintaining these policies, without necessarily announcing new discretionary actions, leading to higher fiscal costs.