Inflation risk looms due to high energy prices
Research - OCTOBER 22, 2021

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Inflation risk looms due to high energy prices

by Denise Moose

Energy prices continued to surge in third quarter 2021, while most non-energy prices plateaued following steep increases earlier in the year, according to the current Commodity Markets Outlook from World Bank.

After reaching all-time highs, natural gas and coal prices are expected to decline in 2022 as demand growth slows and supply constraints ease. Crude oil prices are forecast to average $74 per barrel in 2022, up from a projected $70 per barrel this year.

The report states that after rising more than 48 percent this year, metal prices are projected to decline 5 percent in 2022. Agricultural prices are expected to broadly stabilize in 2022, following a 22 percent increase this year.

High commodity prices, if sustained, could slow growth in energy-importing countries and increase food insecurity in low-income countries. Risks to the forecast include adverse weather, further supply constraints and new outbreaks of COVID-19. The fluctuations in commodit

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