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The war in Ukraine will result in a rise in food and energy prices over the next three years, the World Bank has warned, intensifying fears that the global economy is heading for a repeat of the 1970s situation.
The World Bank says the war will bring huge increases in commodity prices, ranging from natural gas to wheat and cotton. Energy prices are expected to rise by more than 50%, raising bills for households and businesses, says the World Bank.
The biggest increase will be in the price of natural gas in Europe, which is expected to double in cost. Prices are projected to fall next year and in 2024, but even then they will remain 15% higher than last year.
The World Bank clarifies that this means that from the lowest levels of April 2020 to March this year we have seen “the largest 23-month increase in energy prices since the rise in oil prices in 1973”, when tensions in the Middle East pushed up prices.
Similarly, oil prices are expected to remain high until 2024. The World Bank also warned that many foods will see huge increases in their costs. The UN food price index already shows that they are at the highest level since the start of registrations 60 years ago.
On goods in general, the World Bank report says: “While prices are generally expected to peak in 2022, they will remain much higher than previously anticipated.”
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