By Damilola Abiola
Global commodity prices are projected to plunge to their lowest level of the decade by 2026, driven by faltering economic growth and ample oil supply, according to the World Bank’s latest *Commodity Markets Outlook*. The Bank warns that the decline, while easing short-term inflation pressures, could seriously undermine economic prospects for two-thirds of developing economies that rely heavily on commodity exports.
Prices are expected to drop by 12% in 2025 and a further 5% in 2026, sinking below the inflation-adjusted average of 2015–2019 levels for the first time since the pandemic. This marks a sharp reversal from the post-COVID and post-Ukraine war boom.
“Higher commodity prices have been a boon for many developing economies, two-thirds of which are commodity exporters,” said Indermit Gill, World Bank Group Chief Economist and Senior Vice President for Development Economics. “But we’re now seeing the highest price volatility in more than 50 years. The combination of high price volatility and low prices spells trouble.”
The report notes that while falling energy prices have helped cool global inflation—particularly after a 2022 spike driven by surging fuel costs—they now pose a threat to revenue-dependent economies. Brent crude oil prices are forecast to fall to $64 per barrel in 2025 and $60 in 2026, down from $81 in 2024. Coal prices are also projected to decline by 27% this year and a further 5% in 2026.
“These shifts reflect more than just a weak global outlook,” Gill added. “The rapid adoption of electric vehicles, particularly in China, is reducing demand for oil and reshaping global energy dynamics.”
Food prices, too, are set to decline—falling by 7% in 2025 and 1% in 2026. However, the humanitarian outlook remains dire, with the UN estimating 170 million people will face acute food insecurity this year in 22 vulnerable economies.
The World Bank’s Ayhan Kose, Deputy Chief Economist and Director of the Prospects Group, warned that the intense commodity boom-and-bust cycles seen in recent years may become the new norm.
“Commodity prices have whipsawed throughout the 2020s, plummeting with COVID-19, then surging after Russia’s invasion of Ukraine, and now sinking again,” said Kose. “Successfully navigating through repeated swings will require developing economies to build fiscal space, strengthen their institutions, and improve investment climates.”
The Bank calls on developing nations to urgently restore fiscal discipline, liberalize trade, and attract private capital to weather the volatility and sustain economic growth amid an increasingly uncertain global landscape.