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(MENAFN) The World Bank announced on Tuesday that global commodity prices are forecasted to reach their lowest levels in six years by next year, driven by slowing economic growth and an abundance of oil supply.
According to the World Bank’s Commodity Markets Outlook report, “Commodity prices are set to fall sharply this year, by about 12 percent overall, as weakening global economic growth weighs on demand.”
This decline is attributed to the decreased demand for goods resulting from global economic challenges.
Looking ahead to 2026, the report predicts that commodity prices will drop by an additional 5 percent, marking a six-year low.
This sustained fall in prices could help reduce immediate inflation risks stemming from rising trade barriers.
However, it may also dampen the economic growth potential in two-thirds of emerging market economies, as noted by the report.
While nominal prices are expected to remain above pre-pandemic levels, the report highlights that inflation-adjusted prices could dip below the average seen between 2015 and 2019 for the first time.
This indicates a significant shift in commodity pricing trends.
The report further emphasized that global commodity prices have been on a downward trajectory since 2023, which has contributed to curbing inflation worldwide.
In particular, energy prices are projected to decrease by 17.4 percent this year, reaching a five-year low, with a further decline of 5.9 percent expected in 2026.
Specifically, the price of Brent crude oil is anticipated to average USD64 per barrel this year and drop to USD60 per barrel by 2026.
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