The World Bank Group’s latest Commodity Markets Outlook projects global commodity prices to reach a six-year low in 2026, marking a fourth consecutive year of decline. This trend is attributed to weak global economic growth, an expanding oil surplus, and persistent policy uncertainty, with prices expected to drop 7% in both 2025 and 2026.
Key highlights include:
- Energy Prices: Falling energy prices are contributing to lower global inflation. The oil glut is significant and expected to grow, leading to a forecast drop in Brent crude oil prices to $60 in 2026, a five-year low. Overall energy prices are projected to decrease by 12% in 2025 and another 10% in 2026.
- Food Prices: Food prices are also easing, with projected declines of 6.1% in 2025 and 0.3% in 2026. However, fertilizer prices are expected to surge 21% in 2025 due to input costs and trade restrictions, potentially impacting farmers’ profits and future crop yields.
- Precious Metals: Precious metals, particularly gold and silver, have reached record highs in 2025 driven by demand for safe-haven assets and central bank purchases. Gold prices are forecast to rise by 42% in 2025 and an additional 5% in 2026.
- Risks and Opportunities: Potential risks include sluggish global growth, prolonged trade tensions, and increased oil output. Conversely, geopolitical tensions could drive oil and safe-haven commodity prices higher. The rapid expansion of AI and its associated electricity demand may also influence energy and base metal prices.
- Policy Recommendations: The report advises governments to leverage the respite from lower inflation for fiscal reforms, business readiness, and accelerating trade and investment. It also suggests fostering diverse production, investing in technology, improving data transparency, and promoting market-based pricing for long-term resilience, rather than relying on past price-control schemes.
“Commodity markets are helping to stabilize the global economy,” said Indermit Gill, the World Bank Group’s Chief Economist and Senior Vice President for Development Economics. “Falling energy prices have contributed to the decline in global consumer-price inflation. But this respite will not last. Governments should use it to get their fiscal house in order, make economies business-ready, and accelerate trade and investment.”
The report suggests that lower oil prices present an opportunity for developing economies to implement fiscal reforms that foster growth and job creation, including phasing out fuel subsidies to redirect resources towards infrastructure and human capital. The special focus section of the report also reviews the history of international commodity agreements, concluding that market-based pricing and fostering diverse production are more effective for long-term resilience than price-control schemes.
“Lower oil prices provide a timely opportunity for developing economies to advance fiscal reforms that promote growth and job creation,” said Ayhan Kose, the World Bank’s Deputy Chief Economist and Director of the Prospects Group. “Phasing out costly fuel subsidies can free up resources for infrastructure and human capital—areas that create jobs and strengthen long-term productivity. Such reforms would help shift spending from consumption to investment, rebuilding fiscal space while supporting more durable job creation.”
