‘World faces biggest energy shock since 1970s’

Published April 27, 2022
In this file photo taken on April 13, 2022, the World Bank headquarters in Washington, DC, on April 13, 2022. —AFP
In this file photo taken on April 13, 2022, the World Bank headquarters in Washington, DC, on April 13, 2022. —AFP

WASHINGTON: Energy prices have surged since the Russian invasion of Ukraine and, along with other commodities, are likely to remain at “historically high” levels through 2024, endangering economic growth, the World Bank warned Tuesday.

“This amounts to the largest commodity shock we’ve experienced since the 1970s,” said Indermit Gill, the World Bank’s vice president for equitable growth, finance and institutions.

The shock — which is expected to push energy prices up 50 percent this year — is being aggravated by trade restrictions and rising prices for food, fuel and fertilizers.

“These developments have started to raise the specter of stagflation,” Gill warned in a statement on the World Bank’s Commodity Markets Outlook report.

Echoing the call from other officials at the World Bank and International Monetary Fund in recent days, he urged governments to “take every opportunity to increase economic growth at home and avoid actions that will bring harm to the global economy.” The report said the increases in energy prices in the past two years have been the largest since the 1973 oil crisis when the OPEC group of oil-producing countries declared an embargo.

Amid the war and Western sanctions on Moscow, the price of Brent crude is expected to average $100 a barrel this year, the highest since 2013, the report said.

Published in Dawn, April 27th, 2022

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