Commodity Prices Set to Tumble as Tariffs Slow Global Economy

Source: Wall Street Journal

Commodity prices are set to fall sharply this year and next as rising tariffs lead to a slowdown in the global economy, easing inflationary pressures but hitting many poor countries hard, the World Bank said Tuesday.

In a report, the bank said the anticipated declines in prices will cap the most volatile period since the 1970s, with the years since 2020 characterized by rises and falls in commodity prices that have been shorter and sharper than common over most of the last half century.

The outlook for the global economy has darkened since U.S. President Trump began to impose tariffs on imports from a wide range of countries. Most economists have lowered their forecasts for this year, and the World Bank said that if the global economy grows by the 2.3% consensus projection, commodity prices will likely fall by 12%, with a further decline of 5% in 2026.

In January, before the rise in U.S. tariffs was announced, the World Bank forecast economic growth of 2.7% this year, a performance that would have been unchanged from 2024.

Read more: https://www.wsj.com/economy/global/commodity-prices-set-to-tumble-as-tariffs-slow-global-economy-a37b34d4?st=pN7Ssk