World Bank Projects 17% Commodity Price Drop by 2026, Reshaping Inflation and Emerging Markets

This decline, expected to be 12% in 2025 and an additional 5% in 2026, could moderate inflation risks stemming from rising trade barriers. However, it also poses challenges for developing economies, potentially hampering economic progress.

The report highlights increased volatility in commodity markets over the past decade, influenced by trade tensions, geopolitical risks, and climate shocks. While falling energy and food prices are anticipated to ease inflation, they may not fully address underlying issues like conflict-driven hunger.

Industrial metals are also expected to see price drops due to weakening demand and trade tensions, though gold prices are predicted to remain high. The World Bank advises developing economies to focus on fiscal discipline, business-friendly environments, and trade liberalization to navigate these price swings.