International Monetary Fund (IMF) spokeswoman Julie Kozack said commodity prices fell following the cessation of conflicts in the Middle East and steps to reopen the Strait of Hormuz, but normalization will take time.
She reiterated that the war in the region once again tested the resilience of the global economy, saying that the IMF continues to consider three main channels when evaluating the war’s effects on the global economy, which are commodity prices, inflation and inflation expectations, and financial conditions.
Assessing commodity prices, Kozack noted that oil prices retreated from their peaks reached during the war but remain around 10% above pre-war levels.
She stated that jet fuel prices also dropped but continue to stay above pre-war levels, adding that natural gas, base metals, urea, and some fertilizer prices also declined.
Regarding inflation and inflation expectations, Kozack said some central banks raised interest rates while others remained on hold.
She noted that the IMF generally sees inflation expectations anchored, but continues to advise central banks to remain vigilant against a deterioration in these expectations.