The World Bank says the war in Ukraine has caused the biggest commodity shock in half a century 2022-04-27 12:20:08


The sharp rise in energy prices over the past two years is the largest since the 1973 oil crisis, while the jump in food prices is the largest since 2008, the World Bank said on Tuesday in its Commodity Market Outlook report.

“Overall, this represents the largest commodity shock we have seen since the 1970s,” said Endermit Gill, World Bank Vice President for Equitable Growth, Finance and Institutions.

Russia is a major exporter of oil, natural gas, and coal, while Ukraine is a major exporter of wheat and corn. The situation has been exacerbated by rising fertilizer costs and rising prices for major minerals.

The World Bank said that after nearly doubling last year, energy prices are expected to jump more than 50% this year before falling back in 2023 and 2024. Food prices will rise by 22.9% this year, most notably a 40% rise in wheat prices, according to the World Bank. for the report.

The World Bank warned that “these developments are beginning to raise the specter of stagflation.” “Policy makers must seize every opportunity to increase economic growth at home and avoid actions that would harm the global economy.”

The World Bank said prices are expected to remain at “historically high levels” until the end of 2024.

The fear is that higher prices for necessities will have a greater impact on lower-income families.

“The resulting increase in food and energy prices is taking a significant human and economic toll — and likely to hamper progress in poverty reduction,” Ayhan Kose, Director of the World Bank’s Outlook Group, said in the report.