The World Bank Group projects a significant decline in global commodity prices, forecasting a 7 % drop in both 2025 and 2026. This marks the fourth consecutive year of decline and is attributed to weak economic growth, a growing oil surplus, and policy uncertainty. As a result, commodity prices are expected to reach their lowest level in six years by 2026.
According to the World Bank’s latest Commodity Markets Outlook, the falling prices will have mixed effects on the global economy. Dwindling energy prices are easing inflationary pressures, while lower rice and wheat prices are reducing food costs in some developing countries. Nevertheless, commodity prices remain above pre‑pandemic levels, with 2025 and 2026 prices projected to be 23 % and 14 % higher, respectively, than in 2019.
World Bank Chief Economist and Senior Vice President for Development Economics Indermit Gill notes that the decline in energy prices has helped lower global consumer‑price inflation. However, he cautions that this relief is temporary and urges governments to use the opportunity to implement fiscal reforms, promote business‑friendly environments, and accelerate trade and investment.
Deputy Chief Economist Ayhan Kose emphasizes that lower oil prices give developing economies a chance to advance fiscal reforms that foster growth and job creation. He recommends phasing out costly fuel subsidies and reallocating resources to infrastructure and human‑capital development, thereby creating jobs and strengthening long‑term productivity.
The World Bank’s projections suggest that commodity prices will continue to decline in the coming years, with significant implications for the global economy. As governments navigate this new landscape, they must prioritize fiscal discipline, invest in human capital, and promote business‑friendly policies to drive growth and employment. By doing so, they can mitigate the risks associated with falling commodity prices and create a more sustainable economic environment. The forecasts serve as a reminder of the need for proactive economic management and strategic planning to ensure a stable and prosperous future.
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