The World Bank Group has projected that global commodity prices will fall to their lowest level in six years by 2026, marking the fourth consecutive year of decline.

According to the Bank’s latest Commodity Markets Outlook, prices are expected to drop by 7 percent in both 2025 and 2026, driven by sluggish global economic growth, increased oil supply, and policy uncertainties affecting major economies.

While lower energy prices are helping to ease global inflation and falling rice and wheat costs are bringing some relief to developing nations, commodity prices still remain above pre-pandemic levels. The report indicates that in 2025 and 2026, prices will remain 23 percent and 14 percent higher, respectively, than in 2019.

World Bank Chief Economist and Senior Vice President for Development Economics, Indermit Gill, noted that the decline in energy prices has temporarily reduced global consumer-price inflation.

“But this respite will not last,” Gill warned. “Governments should use it to get their fiscal house in order, make economies business-ready, and accelerate trade and investment.”

Supporting the same view, Ayhan Kose, the World Bank’s Deputy Chief Economist, highlighted that lower oil prices present an opportunity for developing nations to push for fiscal reforms that encourage growth and job creation.

He advised governments to phase out costly fuel subsidies, redirecting funds toward infrastructure, education, and human capital development to improve long-term productivity.

“Such reforms will help shift spending from consumption to investment, rebuild fiscal space, and create more sustainable jobs,” Kose added.

The report underscores the need for proactive policy measures to capitalize on the short-term relief from declining prices while positioning economies for more resilient and inclusive growth in the coming years.