‘Low commodity prices undermine growth’

LUSAKA city.

LOW commodity prices are undermining growth prospects for many resource-rich countries that experienced a surge in exploration, investment, and production during the commodities boom of the 2000s, a latest World Bank report has revealed.
The special feature of the Commodity Markets Outlook notes that metal prices are projected to fall by 8.2 percent in the coming year, less than the 10.2 percent drop forecast in January, reflecting expectations of stronger demand growth by China.
“Countries that have borrowed and invested heavily in anticipation of faster growth may struggle to service their debt and sustain investment when growth disappoints as a result of lower commodity prices,” the report says.
In the agriculture sector, the bank forecast that the prices are likely to fall more than projected in January in what is expected to be another favourable harvest year for most grain and oilseed commodities.
The bank also attributes the agricultural commodities prices downward trend to lower energy costs.
Commenting on the projections, World Bank’s development prospects group director Ayhan Kose notes that, “These project delays can adversely affect countries that can ill-afford such setbacks.”
Mr Kose has advised for greater transparency, improved government efficiency and improvements in macroeconomic frameworks which could soften such disruptions.
He said countries may prefer to wait for prices to start rising again before launching new natural resource development initiatives.
The World Bank’s Commodity Markets Outlook, which provides detailed market analysis for major commodity groups, including energy, metals, agriculture, precious metals and fertilisers, is published quarterly, in January, April, July and October.
Price forecasts to 2026 for 46 commodities are presented along with historical price data.

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