World Bank forecasts biggest drop in commodity prices in six years
The World Bank has revised downward its global commodity price forecasts. In its Commodity Markets Outlook (October 2025), the institution anticipates a 7% decline in 2025 and another 7% in 2026, which would bring aggregate indices to their lowest level in six years, according to the official statement released on October 28.
Global slowdown and excess supply
The report highlights that the decline reflects a combination of global economic weakness and production surpluses, particularly in the energy sector. Oil and natural gas prices are projected to fall by 12% in 2025 and 10% in 2026, according to the World Bank’s Commodity Markets Research Unit.
The industrial metals market is expected to follow a similar pattern, with annual drops of around 9%, driven by the slowdown in construction and weaker momentum in the automotive sector. For food commodities, the institution projects a 6% decline in 2025 and a slight 0.3% decrease in 2026, supported by more stable agricultural supply and normalization of logistics costs.
The exception remains gold, whose price—driven by safe-haven demand and central bank purchases—is expected to rise about 42% in 2025 and 5% in 2026, according to the same October report.
An adjustment with asymmetric implications
Although many prices remain above pre-pandemic levels, the World Bank warns that the downward trend will hit natural resource–exporting economies particularly hard. Two-thirds of developing countries still depend on energy, metal, or agricultural exports, making the drop a threat to their fiscal and trade stability.
Among major exporters, some—such as Chile—are seeking to turn their dependence on raw materials into an opportunity to attract innovation and technological investment, as analyzed in Chile: The New Lithium Silicon Valley, by our partner publication.
For importing economies, the trend offers temporary relief: less inflationary pressure and lower production costs. However, the positive effect is limited in a context of weak global growth and low industrial investment.
The energy transition is another key factor in this rebalancing. The rise of renewables and transport electrification is reducing structural demand for fossil fuels, reshaping the foundations of global trade and fiscal revenues for producer nations—a phenomenon already reflected in Sovereign Wealth Funds: The Silent Giants Shaping the Global Economy.
Business and financial impact
For industrial companies, a cheaper commodities environment can ease cost pressures and improve margins. Yet the downside is a less dynamic market and tougher global competition. Exporters will need to strengthen diversification, price hedging, and operational efficiency to adapt to a new reality where prices no longer act as a tailwind.
In financial markets, the flight to gold and other precious metals confirms the shift of capital toward more stable assets, aligning with the World Bank’s view of ongoing geopolitical and monetary uncertainty.
Looking ahead to 2026
The institution does not expect a significant recovery before the second half of 2026. Its baseline scenario envisions global growth below 2.5% and restrained industrial investment. Exporting economies will need to accelerate productive diversification, while importers should take advantage of lower costs to boost competitiveness and reserves.
The era of the commodities “supercycle” appears to have definitively ended. A new phase of moderate prices is beginning—defined by a fragile balance between supply, demand, and the energy transition.
