Global prices for commodities are expected to fall by approximately 7% in both 2025 and 2026, marking a fourth consecutive year of decline, the World Bank stated in its new Commodity Markets Outlook report. The trend is anticipated to provide relief for consumers through lower fuel and food costs but may place financial pressure on commodity-exporting nations.
Leading the decline are energy prices, with Brent crude projected to average $68 per barrel in 2025 and fall further to $60 in 2026, a significant drop from $81 last year and a five-year low. According to the report, the global oil surplus has swelled to 65% above its previous peak in 2020. This is largely attributed to increased production from both OPEC+ and non-OPEC countries like the United States. Recently, several OPEC+ nations agreed to boost oil output, contributing to this surplus.
“Commodity markets are helping to stabilise the global economy,” said Indermit Gill, the World Bank’s Chief Economist. “Falling energy prices have contributed to the decline in global inflation. But this respite will not last.”
Food prices are also expected to moderate, with the Bank forecasting a 6.1% decrease in 2025 before levelling out in 2026, thanks to strong harvests. However, a sharp 21% jump in fertiliser prices this year could impact farmers’ profits.
In contrast to the general downturn, precious metals are experiencing a surge. Gold prices are forecast to climb 42% in 2025 and another 5% in 2026, driven by central bank buying and geopolitical uncertainty. Silver is also projected to hit new highs due to its dual role as a safe-haven asset and a key component in renewable energy technologies.
The report suggests that lower oil prices present a key opportunity for developing countries to implement fiscal reforms, such as phasing out fuel subsidies. “Lower oil prices provide a timely opportunity for developing economies to advance fiscal reforms that promote growth and job creation,” noted Ayhan Kose, the Bank’s Deputy Chief Economist.
However, the World Bank cautioned that the outlook remains fragile, with risks including a sharper-than-expected global economic slowdown or new geopolitical conflicts that could trigger fresh price spikes.
