The World Bank forecasts that food and energy prices will remain at historically high levels until the end of 2024, pressured by the persistence of the war between Russia and Ukraine.
Within the bimonthly report Commodity Prices Outlook, it was highlighted that the prices of non-energy products, which include agricultural products, food and metals, will observe an increase of 20% this year.
It is considered that energy prices will increase by 50% also in 2022 before beginning to moderate in 2023. And he noted that in no case does he expect a total reduction to pre-pandemic levels.
In the introduction to the document, the Vice President of Equitable Growth, Finance and Institutions of the World Bank, Indermit Gill, warned that the increase in inflation in these specific products can raise the specter of stagflation, if a weakening of the economies by the impact of war uncertainty on trade.
Stagflation is a process of rising prices without pressure from demand, a phenomenon that is taking shape at this time, when economies are slowing down or stagnant.
In fact, the Institute of International Finance (IIF) pointed out over the weekend that countries such as Brazil, Mexico, India and Indonesia show signs of already being in stagflation, with clear signs in the two Latin American giants.
This deterioration of conditions in the family economy, as a result of the economic shock of the pandemic and inflation, can fuel poverty and generate pressure on the food supply, they warned. Everything would be assuming that the worsening of the war has all the strength to become something more lasting than in previous episodes, they stressed.
World Bank experts argued that there are two factors that make them project a persistence of up to two years in food and energy inflationary pressures: the lesser space that countries have to substitute the most affected energy products.