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Energy prices are expected to soar by more than 50% in 2022, while non-energy items would rise by over 20%, according to the World Bank. Despite a drop in practically all commodity prices in 2023-2024, researchers believe that commodity prices will be much higher than the five-year average during this time.
The World Bank analysts in their Commodity Market Outlook review note that the consequences of the conflict in Ukraine and the energy situation may be longer than in previous crises - the world economy has entered the era of the strongest commodity shock since the 1970s. Consumers now have less ability to substitute some fossil fuels for others, as rising prices have affected all sectors of the market.
"Tax cuts and subsidies now being practiced by countries instead of long-term measures to reduce demand and encourage alternative sources of supply can only exacerbate shortages and price pressures in the fuel market," the WB warned.
Furthermore, they anticipate that the forced transition to more expensive trading patterns (such as logistics restructuring owing to a change in raw material supplier) will result in extended inflation.
Energy prices are expected to rise by more than 50% in 2022, and non-energy items - by over 20%, according to the World Bank. Commodity prices will fall between 2023 and 2024, but will still be higher than the five-year average. Brent crude will grow 42 percent to $100 per barrel on an annual basis in 2022. If there are no more supply disruptions and increased oil production in nations other than Russia, it will fall to $ 92 per barrel in 2023, with slower growth in demand.
source: worldbank.org
The World Bank analysts in their Commodity Market Outlook review note that the consequences of the conflict in Ukraine and the energy situation may be longer than in previous crises - the world economy has entered the era of the strongest commodity shock since the 1970s. Consumers now have less ability to substitute some fossil fuels for others, as rising prices have affected all sectors of the market.
"Tax cuts and subsidies now being practiced by countries instead of long-term measures to reduce demand and encourage alternative sources of supply can only exacerbate shortages and price pressures in the fuel market," the WB warned.
Furthermore, they anticipate that the forced transition to more expensive trading patterns (such as logistics restructuring owing to a change in raw material supplier) will result in extended inflation.
Energy prices are expected to rise by more than 50% in 2022, and non-energy items - by over 20%, according to the World Bank. Commodity prices will fall between 2023 and 2024, but will still be higher than the five-year average. Brent crude will grow 42 percent to $100 per barrel on an annual basis in 2022. If there are no more supply disruptions and increased oil production in nations other than Russia, it will fall to $ 92 per barrel in 2023, with slower growth in demand.
source: worldbank.org