According to The World Bank, large agricultural sectors, remittances, and public investment have cushioned the impact of sharply weaker terms of trade in commodity-exporting low-income countries (LICs). Growth in LICs was flat in 2014, but is expected to pick up in 2015 and remain robust during 2016–17. Declining commodity prices, however, are likely to increasingly put pressure on fiscal and current account balances of LICs that rely heavily on exports of energy and metals.
According to The World Bank’s Commodity Market Outlook for the third quarter of 2015 most prices declined in the second quarter of 2015 due to ample supplies and weak demand, especially in industrial commodities. Energy prices rose 12 percent in the quarter, with the surge in oil offset by declines in natural gas (down 13 percent) and coal prices (down 4 percent). However, energy prices fell on average to 39 percent below 2014 levels. Natural gas prices are projected to decline across all three main markets—U.S., Europe, and Asia—and coal prices to fall 17 percent.
According to Mizuho Kida, a contributor of World Bank website, the collapse in global oil prices is good news for the Europe and Central Asia (ECA) region, as a large majority of the region’s countries are net fuel importers. Analysis contained in the latest Global Economic Prospects (GEP) suggests that a 45 percent decline in crude oil prices (as projected in the Commodity Markets Outlook) would improve the trade balance of these net oil importers in the region by some 1.8 percent of GDP on average, and by much more for large net importers.
According to an analysis made by the World Bank specialists in February 2015, energy prices increased by 11.7%, while the prices of non-energy commodities went down slightly by 1.5%. Food prices were down by 2.3%. Beverages declined by 1.7%. Raw materials increased by 2.0%, and fertilizers dropped by 3.1%. Metals and minerals decreased by 1.9%, and precious metals slipped by 2.1%.