The World Bank expects commodity prices to remain high until the end of 2024

Food and energy prices, whose rise has been exacerbated by the war in Ukraine, could remain high for several years, the World Bank estimates, in a report published on Tuesday 26 April. “The war in Ukraine caused a major shock to commodity markets and changed the pattern of trade, production and consumption around the world”, notes the institution. The report’s authors believe that “Prices will remain at historically high levels until the end of 2024”.

They point out that the increase in energy prices over the past two years was the biggest since the 1973 oil crisis. “That of food raw materials – of which Russia and Ukraine are the main producers – and of fertilizers, whose production depends on natural gas, has never been stronger since 2008.comments the World Bank. Overall, this is the biggest commodity shock we have seen since the 1970s. “

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“Stagflation spectrum”

“This shock is compounded by increased restrictions on trade in food, fuel and fertilizers.”said Indermit Gill, World Bank Vice President for Fair Growth, Finance and Institutions, adding that this raises the “specter of stagflation”.

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For energy prices alone, the World Bank expects an increase of more than 50% this year, before falling in 2023 and 2024. As for non-energy goods, such as agricultural products and metals, they are expected to increase by almost 20% per year, to then decrease also in subsequent years.

“However, commodity prices are expected to remain well above the average for the past five years and, in the event of a prolonged war or new sanctions against Russia, they could become even higher and more volatile than currently anticipated. “, warns the Washington-based institution. These price increases have “A significant human and economic cost and risk[nt] slow progress in poverty reduction “she complains too.

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The world with AFP

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