Amidst hikes in commodities across the globe, the World Bank Group says global commodity prices will plunge to their lowest level in six years in 2026. This is as it stated the plunge will mark the fourth consecutive year of decline.
The group made this disclosure in its latest Commodity Markets Outlook. It stated that prices are forecast to drop by 7% in both 2025 and 2026. Due to weak economic growth, a growing oil surplus, and policy uncertainty.
The report noted that although dwindling energy prices are easing global inflation, while lower rice and wheat prices are reducing food costs in some developing countries, it stated that commodity prices remain above pre-pandemic levels.
Commodity prices in 2025 and 2026 are projected to be 23% and 14% higher, respectively, than in 2019, according to the Bretton Woods institution report.
World Bank’s Chief Economist and Senior VP for Development Economics, Indermit Gill, noted that falling energy prices have contributed to the decline in global consumer-price inflation.
“But this respite will not last,” Gill warned.
He said, “Governments should use it to get their fiscal house in order. Make economies business-ready, and accelerate trade and investment.”
In his contributions, World Bank’s Deputy Chief Economist, Ayhan Kose, said lower oil prices provide an opportunity for developing economies to advance fiscal reforms that promote growth and job creation.
The Prospects Group Director urged countries to phase out costly fuel subsidies to free up resources for infrastructure and human capital, create jobs, and strengthen long-term productivity.
Such reforms, the official pointed out would help shift spending from consumption to investment, rebuilding fiscal space while supporting more durable job creation.
source: Daily Post