Global Economic Prospects
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Global Economic Prospects is a World Bank Group flagship report that examines global economic developments and prospects, with a special focus on emerging market and developing economies. It is issued twice a year, in January and June. The January edition includes in-depth analyses of topical policy challenges while the June edition contains shorter analytical pieces. Commodity Markets Outlook is now released as its own report, also contained in this collection.
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Publication Global Economic Prospects, January 2025(Washington, DC: World Bank, 2025-01-16) World BankGlobal growth is expected to hold steady at 2.7 percent in 2025-26. However, the global economy appears to be settling at a low growth rate that will be insufficient to foster sustained economic development—with the possibility of further headwinds from heightened policy uncertainty and adverse trade policy shifts, geopolitical tensions, persistent inflation, and climate-related natural disasters. Against this backdrop, emerging market and developing economies are set to enter the second quarter of the twenty-first century with per capita incomes on a trajectory that implies substantially slower catch-up toward advanced-economy living standards than they previously experienced. Without course corrections, most low-income countries are unlikely to graduate to middle-income status by the middle of the century. Policy action at both global and national levels is needed to foster a more favorable external environment, enhance macroeconomic stability, reduce structural constraints, address the effects of climate change, and thus accelerate long-term growth and development.Publication Commodity Markets Outlook, October 2024(Washington, DC: World Bank, 2024-10-29) World BankCommodity prices are expected to decrease by 5 percent in 2025 and 2 percent in 2026. The projected declines are led by oil prices but tempered by price increases for natural gas and a stable outlook for metals and agricultural raw materials. The possibility of escalating conflict in the Middle East represents a substantial near-term upside risk to energy prices, with potential knock-on consequences for other commodities. However, over the forecast horizon, longer-term dynamics—including decelerating global oil demand, diversifying oil production, and ample oil supply capacity—suggest sizable downside risks to oil prices, especially if OPEC+ unwinds its latest production cuts. There are also dual risks to industrial commodity demand stemming from economic activity. On the one hand, concerted stimulus in China and above-trend growth in the United States could push commodity prices higher. On the other, weaker-than-anticipated global industrial activity could dampen them. Following several overlapping global shocks in the early 2020s, which drove parallel swings in commodity prices, commodity markets appear to be departing from a period of tight synchronization. A Special Focus analyzes commodity price synchronization over time and considers the relative importance across commodity cycles of a wide range of demand and supply shocks, including global demand shocks and shocks specific to different commodity markets. It concludes that, while supply shocks were the dominant commodity price driver in the early 2000s and around the global financial crisis, post-pandemic price movements have been more substantially shaped by commodity-specific shocks, such as those related to conflicts.Publication Global Economic Prospects, June 2024(Washington, DC: World Bank, 2024-06-11) World BankAfter several years of negative shocks, global growth is expected to hold steady in 2024 and then edge up in the next couple of years, in part aided by cautious monetary policy easing as inflation gradually declines. However, economic prospects are envisaged to remain tepid, especially in the most vulnerable countries. Risks to the outlook, while more balanced, are still tilted to the downside, including the possibility of escalating geopolitical tensions, further trade fragmentation, and higher-for-longer interest rates. Natural disasters related to climate change could also hinder activity. Subdued growth prospects across many emerging market and developing economies and continued risks underscore the need for decisive policy action at the global and national levels. Global Economic Prospects is a World Bank Group Flagship Report that examines global economic developments and prospects, with a special focus on emerging market and developing economies, on a semiannual basis (in January and June). Each edition includes analytical pieces on topical policy challenges faced by these economies.Publication Commodity Markets Outlook, April 2024(Washington, DC: World Bank, 2024-04-25) World BankThe conflict in the Middle East has been exerting upward pressures on prices of key commodities, notably oil and gold. High commodity prices, despite relatively subdued global GDP growth, suggest some countervailing forces offsetting tepid demand, such as heightened geopolitical strains and increasing metals-intensive investments in the energy transition. Commodity prices are forecast to soften marginally in 2024 and 2025 but remain substantially above pre-pandemic levels. Unlike most other prices, crude oil prices are expected to increase in 2024, mainly reflecting geopolitical tensions. The key risk to commodity price projections relates to the possibility of a broadening of the Middle East conflict, which could lead to significantly higher oil prices, thus reigniting global inflationary pressures. Meanwhile, food insecurity worsened markedly last year, reflecting elevated food prices and armed conflicts around the world. Should such conflicts worsen, global hunger could rise substantially. Heightened uncertainty around the commodity price outlook underscores the importance of forecast accuracy. A Special Focus section evaluates the performance of five approaches used to forecast prices of three commodities—aluminum, copper, and oil. It concludes that there is no “one-approach-beats-all.” Macroeconometric models tend to be more accurate at longer horizons, mainly due to their ability to account for the impact of structural changes. It is, however, critical to incorporate judgment and information that cannot be accounted for by statistical approaches. This highlights the importance of employing a wide range of approaches when forecasting commodity prices.Publication Global Economic Prospects, January 2024(Washington, DC: World Bank, 2024-01-09) World BankNote: Chart 1.2.B has been updated on January 18, 2024. Chart 2.2.3 B has been updated on January 14, 2024. Global growth is expected to slow further this year, reflecting the lagged and ongoing effects of tight monetary policy to rein in inflation, restrictive credit conditions, and anemic global trade and investment. Downside risks include an escalation of the recent conflict in the Middle East, financial stress, persistent inflation, weaker-than-expected activity in China, trade fragmentation, and climate-related disasters. Against this backdrop, policy makers face enormous challenges. In emerging market and developing economies (EMDEs), commodity exporters face the enduring challenges posed by fiscal policy procyclicality and volatility, which highlight the need for robust fiscal frameworks. Across EMDEs, previous episodes of investment growth acceleration underscore the critical importance of macroeconomic and structural policies and an enabling institutional environment in bolstering investment and long-term growth. At the global level, cooperation needs to be strengthened to provide debt relief, facilitate trade integration, tackle climate change, and alleviate food insecurity.Publication Commodity Markets Outlook, October 2023: Under the Shadow of Geopolitical Risks(Washington, DC: World Bank, 2023-10-30) World BankThe conflict in the Middle East—the latest of an extraordinary series of shocks in recent years—has heightened geopolitical risks for commodity markets, in an already uncertain global environment. Before the conflict began, voluntary oil supply withdrawals by OPEC+ producers pushed energy prices up 9 percent in the third quarter. As a result, the World Bank’s commodity price index rose 5 percent over that period and is now 45 percent above its 2015-19 average. For now, the war’s impact on commodity prices have been muted. Prices of oil and gold have risen moderately, but most other commodity prices have remained relatively stable. Nevertheless, history suggests that an escalation of the conflict represents a major risk that could lead to surging prices of oil and other commodities. A Special Focus section provides a preliminary assessment of the potential impact of the conflict on commodity prices. It finds that the effects of the conflict are likely to be limited, assuming the conflict does not widen. Under that assumption, the baseline forecast calls for commodity prices to decline slightly over the next two years. If the conflict does escalate, the assessment also includes what might happen under three risk scenarios, relying upon historical precedents to estimate the effects of small, moderate, and large disruptions to the global oil supply. The magnitude of the effects will depend on the duration and scale of the supply disruptions.Publication Global Economic Prospects, June 2023(Washington, DC: World Bank, 2023-06-06) World BankGlobal growth is projected to slow significantly in the second half of this year, with weakness continuing in 2024. Inflation pressures persist, and tight monetary policy is expected to weigh substantially on activity. The possibility of more widespread bank turmoil and tighter monetary policy could result in even weaker global growth. Rising borrowing costs in advanced economies could lead to financial dislocations in the more vulnerable emerging market and developing economies (EMDEs). In low-income countries, in particular, fiscal positions are increasingly precarious. Comprehensive policy action is needed at the global and national levels to foster macroeconomic and financial stability. Among many EMDEs, and especially in low-income countries, bolstering fiscal sustainability will require generating higher revenues, making spending more efficient, and improving debt management practices. Continued international cooperation is also necessary to tackle climate change, support populations affected by crises and hunger, and provide debt relief where needed. In the longer term, reversing a projected decline in EMDE potential growth will require reforms to bolster physical and human capital and labor-supply growth.Publication Commodity Markets Outlook, April 2023: Lower Prices, Little Relief(World Bank, Washington, DC, 2023-04-27) World Bank GroupGlobal commodity prices fell 14 percent in the first quarter of 2023, and by the end of March, they were roughly 30 percent below their June 2022 peak. The unwinding of prices reflects a combination of slowing economic activity, favorable winter weather, and a global reallocation of commodity trade flows. Commodity prices are expected to fall by 21 percent this year and remain mostly stable in 2024, although the outlook is subject to multiple risks in a highly uncertain environment. These risks include intensification of geopolitical tensions, the strength of demand from China following its post-COVID reopening, likely energy supply disruptions, and weather conditions, including the emerging El Niño. A Special Focus section evaluates the performance of several approaches used to forecast prices of seven industrial commodities. It finds that futures prices, which are widely used for price forecasts, often lead to large forecast errors. Time-series models based on multiple independent variables tend to outperform other model-based approaches as well as futures prices. Machine-learning techniques yield better forecasts than some of the traditional approaches. The analysis suggests that augmenting model-based forecasting approaches—by incorporating the dynamics of commodity prices over time and controlling for other economic factors—enhances forecast accuracy.Publication Global Economic Prospects, January 2023(Washington, DC: World Bank, 2023-01-10) World BankGlobal growth is projected to decelerate sharply, reflecting synchronous policy tightening aimed at containing very high inflation, worsening financial conditions, and continued disruptions from Russia’s invasion of Ukraine. Investment growth in emerging market and developing economies (EMDEs) is expected to remain below its average rate of the past two decades. Further adverse shocks could push the global economy into recession. Small states are especially vulnerable to such shocks because of the reliance on external trade and financing, limited economic diversification, elevated debt, and susceptibility to natural disasters. Against this backdrop, it is critical that EMDE policy makers ensure that any fiscal support is focused on vulnerable groups, that inflation expectations remain well anchored, and that financial systems continue to be resilient. Urgent global and national efforts are also needed to mitigate the risks of global recession and debt distress in EMDEs, and to support a major increase in EMDE investment.Publication Commodity Markets Outlook, October 2022: Pandemic, War, Recession : Drivers of Aluminum and Copper Prices(Washington, DC : World Bank, 2022-10-26) World Bank GroupA sharp global growth slowdown and concerns about an impending global recession are weighing on commodity prices. Some energy prices remain elevated, however, amid geopolitical tensions and persistent supply disruptions. Brent crude oil prices are forecast to average $92/bbl in 2023 and ease to $80/bbl in 2024. Agricultural and metal prices are projected to decline 5 and 15 percent, respectively, in 2023 before stabilizing in 2024. The outlook is subject to multiple risks in a highly uncertain environment. They include worsening global growth prospects, including the pace of recovery in China; macroeconomic uncertainties; a prolonged and deeper conflict in Ukraine; and, in the case of food commodities, the ongoing La Niña weather pattern along with trade policies. A Special Focus section investigates the drivers of aluminum and copper prices. It finds that the price rebound after the pandemic was mainly driven by the economic recovery, but supply factors also contributed about one-quarter to the rebound. Since March 2022, a steep global growth slowdown, an unwinding of supply constraints, and concerns about an imminent global recession contributed to the plunge in metal prices. It concludes that for metal exporters, the energy transition may bring windfalls, but it could also increase their exposure to price volatility.