The World Bank’s latest forecast points to an unsettling future for the global economy. A report published in The Ittefaq yesterday on the subject stated that global commodity prices could rise by as much as 23 percent this year.
The war in the Middle East, disruptions to energy supplies, obstacles to grain transportation through the Black Sea, and climate uncertainty are collectively making the situation increasingly complex.
The question is: who will bear the burden of these rising prices? Not everyone is affected equally by an increase in the cost of living. High-income earners can manage the situation by cutting back on their spending.
Middle-class families may be able to get by for some time by drawing on their savings or reducing essential expenditures. But what options are available to those who earn very little and depend on their daily income to secure their next day's meal?
When the prices of rice, lentils, cooking oil, vegetables, or fuel rise, they first reduce the quantity of food they consume and then compromise on nutrition. Eventually, they are forced to cut spending on healthcare, education, and housing as well. Inflation then strikes directly at people's standard of living and dignity.
There is another dangerous dimension to this crisis. Commodity prices are rising, but employment opportunities and incomes are not increasing at the same rate.
As production costs rise, industrial enterprises become cautious about making new investments, businesses may reduce recruitment, and small enterprises struggle to survive.
When the pace of job creation in the economy slows, the bargaining power of working people also declines. Consequently, the gap between rising prices of essential goods and the uncertainty surrounding income growth continues to widen. People's real purchasing power diminishes. Goods may be available in the market, but not everyone can afford to buy them.
According to the World Bank's report, energy prices could rise by 32 percent and metal prices by 25 percent in 2026. If food prices increase by more than 10 percent this year, they could rise by a further 7 percent next year.
This means that pressure on food security may persist over an extended period. The World Bank has warned that, if conditions deteriorate further, food prices could rise 12 percent more than currently projected.
A combination of a strong El Niño, an escalation of war, and disruptions to supply chains could increase the risk of food shortages in poorer countries. In the past, food crises have pushed millions of people deeper into poverty.
Although the World Bank has also projected that overall commodity prices may decline by 7 percent next year, this forecast cannot be taken as a guarantee of relief.
Even if the projected decline materialises, the crucial question is how far prices will fall from their current elevated levels. A slowdown in the rate of price increases is not the same as a return to previous price levels.
Moreover, if the prices of essential commodities such as food and energy remain high for a prolonged period, the consequences will leave lasting scars on the savings, nutrition, and living standards of low-income people.
The crisis is particularly severe for countries in the Third World. Import-dependent economies, foreign currency constraints, mounting debt burdens, and weak social protection systems reduce their ability to withstand shocks in international markets.
In countries like Bangladesh, rising international prices of energy and food can put pressure on production costs, transportation expenses, and the domestic market for essential commodities.
Under these circumstances, the importance of targeted assistance for the poor, effective initiatives to generate employment, support for agricultural production, and stronger market monitoring becomes even greater.
Rather than announcing temporary relief measures, what is needed is a consistent and realistic course of action.
Instability in the global economy cannot be eliminated overnight. Ending wars, stabilising supply chains, and ensuring international cooperation are indispensable.
How difficult the coming year will be for people around the world will depend not only on the trajectory of rising prices but also on whether consistent, realistic measures are adopted and adequate preparations are made.
