Food and energy prices are expected to remain high for several years, the World Bank estimates in a note published on Tuesday. “The war in Ukraine has caused a major shock to commodity markets and changed the pattern of trade,” the authors say. Prices will stay at historically high levels until the end of 2024.”
An increase not seen since the 1970s
This economic shock is impressive: this rise in energy prices is the largest since the 1973 oil crisis and “it is the biggest commodity shock we have seen since the 1970s” , warns the international institution.
“This shock is aggravated by an upsurge in restrictions on trade in food, fuel and fertilizers,” adds Indermit Gill, vice-president of the World Bank.
A 50% rise in energy prices this year
For energy prices alone, the institution expects an increase of more than 50% this year before a drop in 2023 and 2024. As for those of non-energy goods, such as agricultural products and metals, they should increase by almost 20% in 2022, then also decrease in the following years.
“However, commodity prices are expected to remain well above average, (…) in the event of a prolonged war or new sanctions against Russia, they could become even higher,” argue the editors of this note.