The global commodity surge that followed the COVID-19 pandemic appears to be coming to a close — and not with a soft landing.
According to the World Bank’s latest forecast, commodity prices are set to drop by 12% in 2025 and another 5% in 2026, bringing them back down to pre-pandemic levels.
Energy markets are expected to take the biggest hit. The World Bank predicts energy prices will plunge 17% in 2025 to their lowest point in five years, followed by a further 6% decline in 2026. Brent crude, often seen as a global barometer for economic sentiment, is projected to average just $64 a barrel this year, down from $81 in 2024 — and could dip close to $60 by 2026. Coal is forecast to see an even steeper drop, with prices expected to fall 27% next year.
The slump is attributed to sluggish global economic growth, a rise in protectionist trade policies, and ongoing disruptions in international commerce. While falling prices may offer some relief on the inflation front — particularly in energy — the World Bank cautions that the downside will be severe for many economies.
Energy costs were responsible for adding two percentage points to global inflation in 2022, but easing prices helped moderate inflation in 2023 and 2024. However, for many commodity-dependent countries, especially in the developing world, falling prices pose a significant threat. The report highlights that around two-thirds of developing economies rely heavily on commodity exports for revenue and are now facing the most severe price volatility seen in 50 years.
To weather the storm, the World Bank recommends a return to fundamentals: streamline regulations, attract private investment, and pursue open trade policies to diversify and stabilize these economies.
There is, however, one notable exception in the market: gold. Dubbed the world’s “emotional support metal,” gold prices are expected to hit a record high in 2025 as nervous investors continue to seek out safe-haven assets.
