Energy prices have risen sharply since Russia’s invasion of Ukraine, and are expected to continue at “historically high” levels until 2024, harming economic growth, according to the World Bank.
“This amounts to the largest commodity shock we’ve experienced since the 1970s,” said Indermit Gill, the World Bank’s vice president for equitable growth, finance, and institutions.
Trade restrictions and rising food, fuel, and fertilizer prices are exacerbating the shock, which is predicted to push energy prices up by 50% this year.
Echoing the call from other officials at the World Bank and International Monetary Fund in recent days, he urged governments to “take every opportunity to increase economic growth at home and avoid actions that will bring harm to the global economy.”
The report said the increases in energy prices in the past two years have been the largest since the 1973 oil crisis when the OPEC group of oil-producing countries declared an embargo.
The price of Brent crude is anticipated to average $100 per barrel this year, the highest since 2013, because to the war and Western sanctions against Moscow, according to the research.
Natural gas prices in Europe are anticipated to be double what they were in 2021, with coal costs also touching record highs, according to the report.
Grain prices, of which Russia and Ukraine are major producers, and fertilizer prices have risen the most since 2008, with wheat prices hitting an all-time high this year.
According to the World Bank, non-energy commodity prices, such as agricultural and metals, are expected to rise 20% this year before dropping but will remain above their five-year average.