Africa-Press – Eritrea. The World Bank said Tuesday that global commodity prices are expected to fall to six-year low figures next year on weakening economic growth combined with abundant oil supplies.
“Commodity prices are set to fall sharply this year, by about 12% overall, as weakening global economic growth weighs on demand,” it said in its Commodity Markets Outlook report.
In 2026, commodity prices are projected to decline by another 5%, reaching a six-year low.
The decline could alleviate short-term inflation risks arising from increasing trade barriers but at the same time weaken the economic progress prospects of two out of every three emerging economies, the report said.
In nominal terms, prices will still be higher than before the start of the COVID-19 pandemic, the report said, but inflation-adjusted prices could fall below the average level between 2015 and 2019 for the first time.
The report pointed out that global commodity prices have been declining since 2023, helping to suppress inflation around the world.
Energy prices are expected to decline by 17.4% this year to a five-year low and by 5.9% in 2026.
The price of Brent crude oil is expected to fall to an average of $64 per barrel this year and $60 in 2026.
The report said that global oil supply is expected to exceed demand by 700,000 barrels per day this year, while noting that the rapid spread of electric vehicles also limits oil demand.
In China, the world’s largest automobile market, more than 40% of new vehicles sold last year were battery-powered or hybrid vehicles, almost three times the share in 2021, the report said.
Food prices are expected to fall by 7% in 2025 and 0.9% in 2026.
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 said.
Noting that the price of gold, which has a special position among assets, often rises during periods of geopolitical and political uncertainty, including conflicts, the report said that over the next two years, gold prices are expected to hover about 150% higher than the average of the five years before the COVID-19 outbreak.
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