Globally, the cost of products began to rise in 2021 as a result of the Corona epidemic crisis. The situation worsened when the Russia-Ukraine war broke out in February 2022. Inflation rose to record highs in country after country. But since then, inflation has significantly dropped in developed nations.
Commodity prices have started to stabilize in the global market. In 2024, the price of products in the world market has decreased by 3% overall. A World Bank report predicts that over the next two years, the trend of declining commodity prices will continue. According to World Bank forecasts, commodity prices in the world market will decrease by 5% in 2025 and by 2% in 2026. As a result, commodity prices will fall to the lowest level after 2020. Overall, food prices are expected to fall by 9% and fuel prices by 6% in 2025.
According to the World Bank report, the global GDP growth rate will also remain stable in 2025 and 2026; that is, there will be no growth in GDP, which will suddenly increase the demand for the product and thereby increase the price. However, growth rates in the US and China may be higher than expected. There might be more demand for products as a result.
On the other hand, if the Chinese government increases the incentives to boost the economy, the price of industrial products may increase. China’s growth rate plays a very important role in the rise and fall of commodity prices in the global market. During the period from 2000 to 2019, when China’s growth rate fell, the country’s commodity prices also fell.
On the other hand, if the Chinese government increases the incentives to boost the economy, the price of industrial products may increase. China’s growth rate plays a very important role in the rise and fall of commodity prices in the global market. During the period from 2000 to 2019, when China’s growth rate fell, the country’s commodity prices also fell.
According to the report, lower food and energy prices will also result in a decrease in the global inflation rate overall next year. If commodity prices and inflation decrease, it will be possible to bring down the policy interest rates of various countries within the target range.
World Bank Group Chief Economist and Senior Vice President Indermit Gill said, โBut they will do little to alleviate the pain of high food prices in developing countries where food-price inflation is double the norm in advanced economies. High prices, conflict, extreme weather, and other shocks have made more than 725 million people food insecure in 2024.โ
A popular commodity among investors who want to make safe investments is gold. The World Bank has said that the average price of gold will increase by a record amount this year. The price of the precious metal has risen 21% this year. It is assumed that this trend of price increase will continue next year as well. The price will rise to a record level.
But the report was released before Donald Trump was elected president. Trump’s patronage of cryptocurrencies, including Bitcoin, has already sent gold prices down. It is only natural that if the price of Bitcoin goes up, the price of gold will go down. For that reason, people will start investing in Bitcoin.
Everything depends on global political stability. The World Bank believes that if the supply of goods is not disrupted and the trade barriers are not increased, the trend of price reduction will continue. Donald Trump vows to end the Russia-Ukraine war. But at the same time, he also talked about increasing tariffs. As a result, a mixed environment is expected to prevail in the market.
Also Read: The IMF keeps its forecast for global economic growth at 3.2%
