The World Bank has projected a rise in inflation across emerging market and developing economies in 2026, citing increasing global energy costs and ongoing supply disruptions.
In its latest Commodity Markets Outlook, the institution forecasts that inflation in these economies—including Ghana—will reach about 5.1 percent in 2026, overturning earlier expectations of a decline this year.
The report attributes the expected increase largely to higher energy prices, driven by geopolitical tensions and instability in global supply chains. These pressures are likely to push up production costs across multiple sectors, with the effects gradually passing on to consumers through higher prices for goods and services.
According to the outlook, rising fuel and commodity prices could significantly strain household budgets, particularly in developing economies where spending on essentials takes up a larger share of income. The situation could worsen if disruptions in global energy markets continue.
Under a more severe scenario—where oil prices surge due to prolonged geopolitical conflicts—inflation in emerging economies could rise further to between 5.3 and 5.8 percent, potentially reaching some of the highest levels seen in the past decade.
The report also warns that higher energy costs may dampen real income growth and reduce consumer spending, while increasing operational expenses for businesses. This combination could slow economic activity across many emerging markets.
In response to mounting inflationary pressures, central banks in developing economies may opt to maintain tighter monetary policies. While this could help contain inflation, it may also lead to higher borrowing costs and reduced investment.
Overall, the World Bank highlights the continued vulnerability of emerging markets to global commodity shocks, particularly in countries that depend heavily on energy imports.
Source: businesspostonline
