SDG 8: Decent Work and Economic Growth | SDG 13: Climate Action | SDG 1: No Poverty
Institutions: Ministry of Finance | Reserve Bank of India (RBI)
The World Bank’s Commodity Markets Outlook, October 2025, projects a significant global shift, forecasting that overall commodity prices will decline for a fourth consecutive year, reaching their lowest level in six years by 2026. Prices are expected to fall by 7% in both 2025 and 2026, primarily driven by weak global economic growth, heightened policy uncertainty, and a burgeoning oil surplus from rising global supply.
Key global and India-specific projections include:
Energy Prices: Brent crude is forecast to average $68 per barrel in 2025 and slide further to a five-year low of $60/bbl in 2026. The decline is partially offset by rising natural gas prices.
India’s Role: Strong demand for petrol and liquefied petroleum gas (LPG) means China and India together are expected to account for two-fifths of global oil consumption growth in 2026.
Precious Metals Surge: Defying the downward trend, Gold prices are projected to rise by 42% in 2025 and an additional 5% in 2026, driven by safe-haven demand amid geopolitical uncertainty and strong central bank buying.
Food & Fertilizer: Global rice prices fell sharply due to record production and India’s removal of export restrictions. However, fertilizer prices are projected to climb by 20% in 2025 due to strong demand and trade restrictions, posing a challenge for the agricultural sector.
This widespread commodity price decline offers a critical, but likely temporary, period of respite for India, a major net commodity importer. The resulting easing of inflation and improvement in the current account balance provides a crucial window of opportunity for the government to push through difficult fiscal reforms, strengthen the financial sector, and redirect subsidies away from consumption and toward productive investment.
What is the World Bank’s overall commodity price index?→ The World Bank’s overall commodity price index is a measure that tracks the global price movements of a basket of major commodities, which are divided into energy (oil, gas, coal) and non-energy groups (metals, agriculture, fertilizer). This index is used by policymakers and economists to forecast global inflation, analyze terms of trade for developing countries, and inform critical decisions on fiscal and monetary policy.
Follow the full report here: Commodity Markets Outlook, October 2025 (World Bank)