30.04.2025 14:41
The World Bank announced that global commodity prices are expected to fall to levels not seen since 2020 due to a weakening in economic growth and abundant oil supply. Prices are anticipated to drop to their lowest level in six years by 2026, with declines also expected in the food and energy sectors.
The World Bank reported that global commodity prices are expected to fall to levels not seen since 2020 due to the combination of weakening economic growth and abundant oil supply. The bank published the April edition of the Commodity Markets Outlook Report. The report noted that global commodity prices are expected to drop to their lowest level in six years by 2026.
EXPECTATIONS FOR ECONOMIC PROGRESS MAY WEAKEN
The report stated that the combination of weakening economic growth and abundant oil supply is expected to lead to global commodity prices falling to levels not seen since 2020. It was mentioned that this decline could alleviate short-term inflation risks arising from increasing trade barriers, but it could also weaken the expectations for economic progress in two out of three developing economies. The report indicated that global commodity prices are expected to decrease by 12.4% in 2025 and by 4.8% in 2026.
THE TREND OF FALLING ENERGY PRICES MAY MITIGATE SOME PRICE EFFECTS OF HIGH TARIFFS
The report noted that nominally, prices would still be higher than the levels before the COVID-19 pandemic, but inflation-adjusted prices could fall below the average levels between 2015 and 2019 for the first time. The report indicated that global commodity prices have shown a decline since 2023, helping to suppress inflation worldwide. It was stated that the decline in energy prices would help reduce inflation in 2023 and 2024, and this downward trend is expected to intensify this year, potentially mitigating the price effects of high tariffs in major economies.
HUGE DROP IN ENERGY! LOWEST PRICES IN 5 YEARS ARE COMING
The report noted that energy prices are expected to decline by 17.4% this year, reaching the lowest level in five years, and to drop by 5.9% in 2026. The bank's report projected that the price of Brent crude oil would average $64 per barrel this year and fall to $60 in 2026. The report indicated that global oil supply is expected to exceed demand by 700,000 barrels per day this year, and the rapid spread of electric vehicles is also limiting oil demand. It was shared that in China, the world's largest car market, more than 40% of new vehicles sold last year were battery-powered or hybrid vehicles, nearly three times the share in 2021.
FOOD PRICES ARE EXPECTED TO FALL
The report emphasized that food prices are also expected to decline, with prices projected to decrease by 7% in 2025 and by 0.9% in 2026. It was noted that the United Nations (UN) predicts that acute food insecurity will intensify this year in some of the regions most severely affected globally, impacting 170 million people in 22 highly vulnerable economies. The report stated that the decline in food commodity prices would provide some support for humanitarian efforts, especially in an environment where humanitarian aid funds are shrinking.
NEW RECORD EXPECTED FOR GOLD THIS YEAR
The report stated that the average price of gold, a popular choice for investors seeking a "safe haven," is expected to reach a new record this year before stabilizing in 2026. The report noted that gold, which holds a special position among assets, often rises during periods of geopolitical and political uncertainty, including conflicts. It was reported that gold prices are expected to be approximately 150% higher than the average of the previous five years before the COVID-19 pandemic over the next two years. However, the report also noted that the prices of industrial metals are expected to decline in the 2025-2026 period due to weakening demand caused by increasing trade tensions and the slowdown in China's real estate sector.