World Bank warns of rising inflation in emerging economies, including Ghana, by 2026

Inflation in emerging and developing economies is projected to climb to 5.1 percent by 2026, driven largely by rising global energy costs and persistent supply chain disruptions, the World Bank has warned.

In its latest Commodity Markets Outlook, the global financial institution revised earlier predictions that inflation would decline this year, now forecasting an upward trend across emerging markets—including Ghana.

According to the report, energy price shocks and geopolitical tensions are raising production and operational costs in multiple sectors worldwide. These increases in fuel and other key commodity prices are expected to feed directly into consumer goods, placing additional strain on household spending in developing countries.

The World Bank cautioned that the outlook could worsen if global energy supply disruptions persist. In a scenario where oil prices surge significantly due to prolonged geopolitical instability, inflation in these economies could rise to between 5.3 and 5.8 percent in 2026—levels not seen in nearly a decade.

Rising energy costs are likely to dampen real income growth, reduce consumer purchasing power, and increase business operating expenses across many emerging markets, the report said.

The Bank also noted that central banks in developing economies may be forced to maintain stricter monetary policies to control inflation, potentially leading to higher borrowing costs and reduced investment.

Overall, the outlook underscores how exposed emerging economies are to global commodity price shocks—particularly those, like Ghana, that depend heavily on imported energy.