The World Bank forecasts an 11% drop in energy prices in 2023

The world Bank The US said on Wednesday it expects energy prices to decline 11% in 2023 after rising 60% this year, as slower global growth and continued Covid-19 restrictions in China pose downside risks.

The bank projects an average price of crude Brent of $92 a barrel in 2023, which will drop to $80 in 2024, but well above the five-year average of $60.

According to the report, Russian oil exports could be reduced by up to 2 million barrels per day due to the European Union embargo and restrictions on insurance and shipping.

The Group of Seven oil price cap proposal could affect the flow of Russian crude, but would need the participation of large emerging markets and developing economies to be effective, the entity said, calling the mechanism ” not tested”.

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The world Bank said that he dollar strengthening – and the decline in the value of the currencies of most developing economies – had pushed up food and fuel prices, which could exacerbate the food insecurity that already affects 200 million people worldwide.

The combination of high commodity prices and persistent currency depreciation is leading to higher inflation in many countries,” said Ayhan Kose, who leads the World Bank group producing the report.

Kose added that emerging and developing economies should prepare for “a period of even greater volatility in global financial and commodity markets.”

According to the report, nearly 60% of oil-importing emerging markets and developing economies saw crude oil prices rise in domestic currency as a result of the Russian invasion of Ukrainewhich began on February 24.

Nearly 90% of these economies also saw a larger increase in local currency wheat prices, according to the report.

Although energy prices are softening, they will still be 75% above the average of the last five years, according to the bank.

Both natural gas and coal prices are forecast to decline in 2023 from record highs this year, but Australian coal and US natural gas prices are still expected to double their five-year average in 2024.

The prices of natural gas in Europe could be almost four times higher, according to the report.

Coal production, meanwhile, is increasing significantly as major exporters have increased their output, putting climate change targets at risk.