The World Bank has issued a warning that global commodity prices are likely to increase by 23% in 2026. This surge is attributed to various factors, including geopolitical tensions, supply chain disruptions, and a significant rise in energy costs. The bank's forecast indicates that energy prices will experience a substantial jump of 32% in 2026.
The energy sector is expected to see a significant increase, with the price of Brent crude oil estimated to average $92 per barrel. Furthermore, the global oil supply is predicted to decline by 5.2%, marking the largest drop in four decades, excluding periods of global recession.
The impact of rising commodity prices will also be felt in the food sector, with prices expected to increase by over 10% in 2026. Additionally, fertilizer prices are anticipated to rise by 14%. The prices of precious metals, often sought after as safe-haven assets, are expected to increase by 40%, while industrial metals, driven by the transition to renewable energy and data center demands, are predicted to rise by 25%.
The World Bank's analysts have expressed concerns that the surge in global commodity prices could lead to increased inflation, weigh on economic growth, and exacerbate food insecurity, particularly in vulnerable countries. The bank warns that an escalation of conflicts, combined with climate shocks and further disruptions to cereal exports, could push an additional 40 million people into extreme poverty.
In response to these risks, the World Bank has mobilized $8.7 billion in concessional aid and loans to support 25 countries affected by the repercussions of the Middle East conflict. The bank's efforts aim to mitigate the impact of rising commodity prices on the most vulnerable populations.
The World Bank's forecast for 2026 and 2027 indicates a growth rate of 2.7% and 3.1%, respectively. The bank's president, Ajay Banga, has called for a new development model centered on job creation, highlighting the need for a shift in the global economic approach.
The bank's warning comes as global economies continue to navigate the challenges of rising commodity prices, and policymakers seek to address the potential impacts on inflation, growth, and food security. The World Bank's alert underscores the need for vigilance and proactive measures to mitigate the effects of the expected surge in global commodity prices.
Key points
- The World Bank warns of a 23% surge in global commodity prices for 2026.
- Energy prices are expected to increase by 32% in 2026, driven by geopolitical tensions and supply chain disruptions.
- The World Bank has mobilized $8.7 billion in concessional aid and loans to support countries affected by rising commodity prices.
