Raw materials and geopolitical tensions: a challenge for controlling inflation

Raw materials and geopolitical tensions: a challenge for controlling inflation
Raw materials and geopolitical tensions: a challenge for controlling inflation

By The Economist | 02/05/2024 – 11:51 | Share

Global commodity prices are beginning to stabilize after a significant fall in 2023, impacting inflation.

However, this stabilization could undermine central banks’ efforts to reduce interest rates. The World Bank emphasizes that geopolitical tensions, particularly in the Middle East, could reverse the disinflation trend observed recently. The prices of oil and other raw materials remain supported by these tensions. An escalation in the Middle East could lead to higher oil prices, affecting global inflation.

Additionally, gold, natural gas and food prices could rise if there is a supply disruption. Meanwhile, investments in green technology are driving demand for metals, such as copper and aluminum.

The report highlights the importance of diverse analysis to accurately predict commodity prices amid increasing geopolitical volatility.

M.Ba.

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