Commodity Markets Outlook, April 2023

Commodity Markets Outlook, April 2023

The World Bank (WB) published the next edition of the annual report "Commodity Markets Outlook, April 2023".

Experts expect the most rapid drop in world commodity prices since the start of the COVID-19 pandemic, which will negatively affect the economic growth prospects of more than 60% of all developing countries exporting raw materials.

According to the organization’s forecasts (compared to 2022):

  • an average decline in commodity prices of 21%;
  • energy prices will fall by 26%;
  • the average price of Brent oil will drop by 16% to $84 per barrel;
  • the price of natural gas in Europe and the US will decrease by 50%, for coal - by 42%;
  • prices for fertilizers will decrease by 37%.

The report also evaluates the effectiveness of various price forecasting methods for seven types of industrial raw materials (oil and six industrial metals). One of the main findings is that futures prices, widely used for making price forecasts, lead to significant forecasting errors. Econometric models based on many independent variables give more accurate results.

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