“Commodity markets are helping to stabilize the global economy,” said Indermit Gill, the World Bank’s Chief Economist. “But this respite will not last. Governments should use it to get their fiscal house in order.”
The oil glut has surged in 2025 and is expected to rise further next year, driven by slower demand growth amid rising EV adoption and stagnant consumption in China. Oil output from major producers is also expanding. Brent crude prices are forecast to average $60 a barrel in 2026 — the lowest in five years.Energy prices overall are set to decline by 12% in 2025 and another 10% in 2026.
Food prices are projected to fall 6.1% in 2025 and slip slightly in 2026, helped by lower rice and wheat prices. However, fertilizer costs are expected to jump 21% next year before moderating—a squeeze that could hurt farm profitability and future crop yields.
Amid geopolitical tensions and policy uncertainty, investors are rushing to safe havens. Gold prices are expected to jump 42% in 2025 and continue rising in 2026, reaching nearly double their 2015-19 average. Silver is also headed for record highs over the forecast period.
The World Bank warned that prolonged trade frictions, stronger EV adoption and additional OPEC+ output could push commodity prices even lower. Conversely, conflicts, sanctions or extreme weather events linked to La Niña could disrupt supply chains and drive prices higher.
“Lower oil prices provide a timely opportunity for developing economies to advance fiscal reforms,” said Ayhan Kose, the World Bank’s Deputy Chief Economist, calling for reallocation of fuel subsidies toward productive investment.
