World Bank Projects Sharp Global Commodity Price Fall by 2026, Warns Nations to Brace for Economic Reforms

|By Babatunji Wusu

Global commodity prices are expected to tumble to their lowest point in six years by 2026, marking a fourth straight year of decline, according to the World Bank Group’s latest Commodity Markets Outlook.

The report forecasts a 7 percent drop in prices in both 2025 and 2026, driven by sluggish global growth, expanding oil surpluses, and mounting policy uncertainty.

While sliding energy costs are helping to cool global inflation, and lower rice and wheat prices are easing food pressures in some developing economies, the World Bank notes that overall commodity prices remain above pre-pandemic levels. Prices in 2025 and 2026 are projected to stay 23 percent and 14 percent higher, respectively, than in 2019.

World Bank Chief Economist and Senior Vice President for Development Economics, Indermit Gill, said that falling energy prices have played a key role in easing global inflation.

“But this respite will not last,” Gill cautioned. “Governments should use it to get their fiscal house in order, make economies business-ready, and accelerate trade and investment.”

Echoing the same sentiment, Ayhan Kose, the Bank’s Deputy Chief Economist, said the drop in oil prices presents a critical window for developing economies to push through fiscal reforms that can stimulate growth and job creation.

Kose, who also directs the Bank’s Prospects Group, urged governments to phase out expensive fuel subsidies and redirect funds toward infrastructure, education, and innovation. According to him, such measures will rebuild fiscal stability, drive long-term productivity, and create more sustainable employment opportunities.