Global commodity prices are anticipated to reach a six-year low by 2026, influenced by slowing economic growth and ample oil supply, according to the World Bank's latest Commodity Markets Outlook. This decrease could potentially lessen short-term inflation risks from escalating trade tensions but might also impede economic progress in two-thirds of developing economies.
Commodities are projected to fall 12% in 2025 and another 5% in 2026, reaching the lowest point since 2020. While prices remain nominally above pre-pandemic levels, after inflation adjustments, they could dip below the average from 2015 to 2019. This marks the end of a period driven by the global recovery post-COVID-19 and events like Russia's 2022 Ukraine invasion. Indermit Gill, the World Bank Group's Chief Economist, notes, "We’re now seeing the highest price volatility in more than 50 years."
The decline, which began in 2023, has eased global inflation. Energy prices dropping further in 2025 and 2026 could counter higher tariffs' effects in major economies. Brent crude oil is forecasted to average $64 a barrel in 2025, decreasing to $60 in 2026. Coal prices are also set for a reduction, with a 27% drop expected this year. These trends signal weaker economic growth and a long-term slowness in oil demand.
Food prices are predicted to fall by 7% in 2025 and 1% more in 2026. Despite this, the United Nations warns of worsening food insecurity for 170 million people in vulnerable areas. Meanwhile, gold's price, benefiting from geopolitical uncertainty, is expected to hit new highs this year.
Ayhan Kose, Deputy Chief Economist at the World Bank, highlights the intensified cycles of boom and bust in commodity prices during the 2020s. "Successfully navigating through repeated commodity prices swings will require developing economies to build fiscal space, strengthen their institutions, and improve investment climates," he says.
Links to the full report and related data are provided by the World Bank. The full report can be accessed online through the World Bank's digital platforms.