World Bank sees 'significant' inflation risk from high energy prices

• Energy prices are expected to inch up in 2022 after surging more than 80% in 2021, fueling significant near-term risks to global inflation in many developing countries, the World Bank said in its latest Commodity Markets Outlook on Thursday. 
• The multilateral development bank said energy prices should start to decline in the second half of 2022 as supply constraints ease, with non-energy prices such as agriculture and metals also expected to ease after strong gains in 2021. 
• "The surge in energy prices poses significant near-term risks to global inflation and, if sustained, could also weigh on growth in energy-importing countries," said Ayhan Kose, chief economist and director of the World Bank's Prospects Group, which produces the Outlook report. 
• The World Bank noted that some commodity prices rose to or exceeded levels in 2021 not seen since a spike a decade earlier. Natural gas and coal prices, for instance, reached record highs amid supply constraints and rebounding electricity demand, although they are expected to decline in 2022 as demand eases and supply improves, the bank said.

 

(Source: Reuters)