World Bank oil price forecast lower than government’s target in 2025 budget

The World Bank has cautioned that commodity prices are set to fall sharply this year, by about 12%.

The Bretton Woods institution attributes this to weakening global economic growth.

This could have some implications for government’s projected revenue from the export of oil and gold in the 2025 budget.

In the 2025 budget, government is projecting over one billion dollars in revenue from crude oil exports, based on a benchmark price of $74 per barrel.

The World Bank is warning that prices are expected to fall to about $64 a barrel this year.

According to the World Bank, oil prices are also expected to exert substantial downward pressure on the total commodity index in 2025, as a marked slowdown in global oil consumption coincides with expanding supply.

It said the anticipated commodity price softening will be broad-based, however, with more than half of the commodities in the forecast set to decrease this year, many by more than 10 percent.

The situation the Bretton Woods institution warned could have a knock-on consequence for economic activity and inflation for developing countries like Ghana.

The World Bank in its Commodity Markets Outlook report also pointed out that there are important upside risks to commodity prices—for instance, if geopolitical tensions worsen, threatening oil and gas supplies, or if extreme weather events lead to agricultural and energy price spikes.

Source: myjoyonline.com